RBI proposes tighter leverage norms for banks, aligns with Basel

The Reserve Bank of India is the referee that makes rules for banks in India to keep them safe and fair.

It has proposed new rules about the leverage ratio, which checks whether a bank has enough of its own money compared to all the money it lends and owes.

This helps make sure a bank doesn't take too many risks with people's savings.

The new rules follow similar international rules from a group called the Basel Committee on Banking Supervision.

Most banks in India would need to keep at least 3.5% of their total exposure as their own money.

Big, very important banks would need to keep a bit more, at 4%.

Foreign bank branches that are very large might need to keep even more.

Banks that don't follow the rule might not be allowed to give money back to their shareholders.

In very rare tough times, the RBI might use special flexibility to help the economy.

The RBI wants people to send their comments about the new rules by August 28.