RBI proposes new leverage ratio norms for banks
The Reserve Bank of India has published draft directions to update the leverage ratio framework for commercial banks, adopting the Basel Committee's 2017 standard. The proposal amends Chapter VII of the capital…
The Story in Brief
The Reserve Bank of India has published draft directions to update the leverage ratio framework for commercial banks, adopting the Basel Committee's 2017 standard. The proposal amends Chapter VII of the capital adequacy norms issued in 2025.
Comments must be submitted by August 28, 2026. The RBI has invited feedback through its 'Connect 2 Regulate' portal or by post or email. The move aims to curb excessive risk-taking by limiting bank leverage.
The Indian Opinion
The RBI's move to tighten leverage norms is prudent, but some banks may cry foul over compliance costs. Yet the Basel standard is a global benchmark, not a whim. Indian banks have faced capital adequacy questions before; this is a necessary step. The real test will be how many banks fail to meet the proposed ratio by the deadline. Watch for the number of non-compliant lenders in the feedback period.
Source: rbi.org.in
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