The Basel  2  BIS Review 114/2010  Committee’s response to containing this excess is the introduction of a leverage ratio which will be a simple, transparent, non-risk based measure calibrated to act as a credible supplement and backstop to the risk-based requirements. Containment of financial leverage of banks – impact on Indian banks 14.
Estimates show that the leverage in the Indian banking system is quite moderate. In the BCBS deliberations, we argued that the SLR portfolio of our banks, which is a regulatory mandate, should be excluded from the calculation of the leverage ratio as this carries only a moderate risk (i.e. no credit risk and only market risk).