The RBI has issued the Eleventh Amendment Directions, 2026, updating the leverage ratio framework for commercial banks to align with the 'leverage ratio 2017 standard'. The changes impact capital adequacy compliance.
RBI Updates Leverage Ratio Framework for Commercial Banks
The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Eleventh Amendment Directions, 2026, effective October 23, 2026. The amendment modifies Chapter VII of the existing Directions to align India’s leverage ratio framework with the 'leverage ratio 2017 standard' issued by the Basel Committee on Banking Supervision.
The revised framework tightens requirements on exposure measurement, including off-balance sheet items, derivatives, and securities financing transactions. It aims to enhance the resilience of banks by ensuring sufficient capital buffers relative to total exposure, independent of risk-weighting.
This update is critical for bank legal and compliance teams, who must recalibrate internal reporting systems and disclosures under the revised prudential norms. Institutions are advised to conduct gap analyses and submit compliance reports within stipulated timelines to avoid supervisory action.
Citations
- RBI (Commercial Banks – Prudential Norms on Capital Adequacy) Eleventh Amendment Directions, 2026
