Mumbai: In order to ensure that investment banks (i-banks) do not become a potential cause of financial vulnerability, the activities of investment banks (i-banks) in the country should be monitored in privy by the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI), as per the RBI. According to Business Standard, at present, investment banks registered in India are solely regulated by the capital markets regulator SEBI. "In order that investment banks are not considered a potential source of financial vulnerability, it would be necessary for RBI and SEBI to have access to information on their activities, together with a higher level of risk transparency in case of financial products issued or brokered by them," RBI said in the Financial Stability Report released. While acknowledging the limited leverage capacity of investment banks in India, RBI said the risk arose from linkages of these banks with other financial institutions, including group companies. It added that any instance of regulatory arbitrage must be dealt with. However, the leverage of the country's commercial banks was not a concern, the report said. The leverage of the Indian banking system, measured as the ratio of assets and off-balance sheet items to capital, stood at 16.3 times at September-end 2009 and decreased marginally to 16.1 at December-end 2009. Adjusting for the mandatory 25 per cent investment of banks' deposits in government and other approved securities, the leverage ratio was considerably lower at 12.9 times at December-end 2009. An analysis of the capital adequacy ratio (CAR) and leverage of the top 60 banks in India showed most banks were concentrated in the range of a CAR of 12-16 percent and leverage of 13-20 times as of the end of September 2009. As on December 31, 2009, no bank was in the high-risk category of low CAR and high leverage.