RBI adopts Basel's 2017 leverage ratio standard for commercial banks, effective April 2027

On 23 October 2026, the Reserve Bank of India notified the Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Eleventh Amendment Directions, 2026, replacing Chapter VII of its 2025 Capital Adequacy Directions to align India's bank leverage ratio framework with the Basel Committee on Banking Supervision's 2017 leverage ratio standard. The leverage ratio, Tier 1 capital divided by a bank's total exposure, must now be at least 4% for Domestic Systemically Important Banks (D-SIBs) and 3.5% for other commercial banks, while Indian branches of Global Systemically Important Banks (G-SIBs) must hold 3.5% plus an applicable G-SIB leverage buffer; a bank that misses its buffer faces restrictions on capital distributions set out in a table linked to its common equity and leverage ratio levels. The amendment introduces a new method for banks using the Standardised Approach for Counterparty Credit Risk (SA-CCR) to calculate derivative exposure for this ratio, including a 1.4 multiplier on replacement cost plus potential future exposure and rules on collateral, clearing members and credit derivatives.

Banks must disclose their quarterly leverage ratio, standalone and consolidated, report detailed calculations to the RBI's Department of Supervision, and make Pillar 3 disclosures using prescribed templates. RBI issued the Directions under Section 35A of the Banking Regulation Act, 1949, after examining feedback on a draft version published in August 2026; they take effect from 1 April 2027.