Reserve Bank of India Proposes New Leverage Buffer for Global Banks' Indian Branches
The Reserve Bank of India (RBI) has proposed a new leverage ratio buffer for Indian branches of global systemically important banks (G-SIBs). This move is part of revised capital adequacy norms aimed at aligning India's regulations with the Basel Committee on Banking Supervision's 'Leverage Ratio 2017 Standard'. The draft directions require G-SIB branches in India to maintain a minimum leverage ratio of 3.5%, in addition to any leverage ratio buffer applicable to the parent global bank. The RBI has also proposed restrictions on capital distributions by a G-SIB branch if it fails to meet its leverage ratio buffer requirement. These changes are part of the draft Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Eleventh Amendment Directions, 2026, and are scheduled to come into effect from April 1, 2027. The RBI has invited comments on the draft directions until August 28, 2026. 
