The RBI issued the Eleventh Amendment Directions, 2026, updating leverage ratio frameworks for commercial banks to align with the 'leverage ratio 2017 standard'. The changes reinforce prudential norms and strengthen systemic resilience against financial shocks.
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 revises Chapter VII of the existing Directions to align India’s leverage ratio framework with the Basel Committee’s 'leverage ratio 2017 standard'.
Key changes include recalibration of exposure measurement, adjustments for derivative contracts, and enhanced reporting requirements for off-balance-sheet items. The framework aims to ensure sufficient capital buffers across economic cycles and mitigate risks arising from excessive leverage in the banking sector.
Banking legal teams must review internal compliance mechanisms and coordinate with risk and finance departments to implement revised reporting templates. The update reinforces regulatory scrutiny on systemic risk and will impact capital planning strategies. These amendments reflect RBI’s proactive stance in maintaining financial stability amid evolving macroeconomic conditions.
Citations
- RBI (Commercial Banks – Prudential Norms on Capital Adequacy) Eleventh Amendment Directions, 2026
