Leverage ratio is relaxed to support bank lending
Leverage ratio (LR) for banks to help them expand their lending activities is relaxed Reserve Bank of India (RBI) by reducing it to 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for other banks. Leverage ratio, as defined under Basel-III norms, is Tier-I capital as a percentage of the bank’s exposures. It is designed to capture leverage associated with both on- and off-balance sheet exposures.
