The Reserve Bank of India (RBI) on Friday proposed changes to the leverage ratio framework for banks, aligning domestic capital adequacy rules with the latest standards prescribed by the Basel Committee on Banking Supervision (BCBS). “To ensure alignment with the latest leverage ratio framework (‘leverage ratio 2017 standard’) issued by the Basel Committee on Banking Supervision, there is a felt need to amend these Directions,” the RBI said in its draft amendment to the Prudential Norms on Capital Adequacy. The leverage ratio, which acts as a backstop to risk-based capital requirements, is calculated by dividing a bank’s Tier 1 capital by its total exposure. The RBI has proposed retaining the minimum ratio at 4% for domestic systemically important banks (D-SIBs) and 3.5% for other banks.