Risk-weighted assets

A bank's assets scaled by how risky each is, so that a government bond and an unsecured personal loan do not count equally against capital.

A bank with ₹42,000 crore of loans at a full weight and ₹12,000 crore weighted at one and a half times carries ₹60,000 crore of risk-weighted assets.

The weights are what make the capital ratio meaningful and also what make it gameable. Shifting the mix toward assets with lower regulatory weights raises the ratio without reducing the economic risk by as much, which is one reason a bank's leverage ratio, computed on unweighted assets, is reported alongside.

Compare the growth of risk-weighted assets to the growth of the loan book. A gap means the mix changed.