Capital / Basel

Banks must hold a minimum total capital ratio plus a capital conservation buffer against risk-weighted assets, with the highest-quality common equity meeting its own floor. The precise levels are in the applicable circular below.

Risk weights scale each exposure by its riskiness before capital is computed, so a safe sovereign exposure consumes far less capital than an unsecured consumer loan. RBI adjusts these weights as a prudential lever.

Banks whose failure would disrupt the wider system are designated D-SIBs and must hold an additional capital surcharge scaled to their systemic importance. The framework is tracked in the cluster below.