Home › Circulars › RBI/2005-06/343

RRBs get one-year extension on SLR securities MTM exemption

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2005-06/343 · issued 31 Mar 2006 · ~1 min read
Quick answerRBI has extended the exemption for RRBs from mark-to-market norms on SLR securities by one more year, covering FY 2006-07. RRBs can classify their entire SLR portfolio under Held to Maturity, valuing at book value with premium amortisation.

What changed

The exemption from mark-to-market norms for RRBs' investments in SLR securities, originally granted up to FY 2005-06, has been extended for FY 2006-07. RRBs now have the freedom to classify their entire SLR portfolio under Held to Maturity for this period, with valuation on book value basis and amortisation of premium over the remaining life of securities.

What it means for you

This extension provides RRBs with continued relief from market volatility in their SLR portfolios, allowing them to avoid marking losses to their profit and loss statements. It simplifies valuation and reduces capital adequacy pressure, but may mask underlying interest rate risks. Banks should note this is a temporary measure for one more year.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All Regional Rural Banks (RRBs), Sponsor Banks of RRBs

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the key change in this circular?

RBI has extended the exemption from mark-to-market norms for RRBs' SLR securities by one year, covering FY 2006-07, allowing them to classify the entire portfolio under Held to Maturity.

How should RRBs value their SLR securities under this exemption?

RRBs must value the securities on book value basis and amortise any premium over the remaining life of the securities.

Does this circular apply to all RRBs?

Yes, it applies to all Regional Rural Banks and their Sponsor Banks as per the circular addressed to their Chairmen.

📜 This document’s life story (2 recorded events, each backed by RBI’s own words)
Extended by RRBs Get One-Year Extension on MTM Exemption for SLR Securities
RBI’s words: “the exemption granted to RRBs up to the financial year 2006-07 from 'mark to market' norms... be extended by one more year”
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2685: RPCD.RRB.BC.No.71/03.05.34/2005-06 — "Valuation of Investment in SLR / Approved Securities by Regional Rural Banks (RRBs)" dated March 31, 2006”
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/343 RPCD.RRB.BC.No.71/03.05.34/2005-06 March 31, 2006 The Chairmen All Regional Rural Banks/Sponsor Banks Dear Sir, Valuation of investment in SLR/Approved Securities by Regional Rural Banks (RRBs) Please refer to our circular RPCD.RRB.BC.No.20/03.05.34/2005-06 dated July 15, 2005 on the above subject. 2. The matter has been reviewed and it has been decided that the exemption granted to RRBs up to the financial year 2005-06 from 'mark to market' norms in respect of their investments in SLR securities be extended by one more year i.e. for the financial year 2006-07. Accordingly, RRBs will have the freedom to classify their entire investment portfolio of SLR securities under 'Held to Maturity' for the financial year 2006-07 with valuation on book value basis and amortisation of premium, if any, over the remaining life of securities. 3. Please acknowledge receipt to the respective Regional Office. Yours faithfully, (G. Srinivasan) Chief General Manager.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/343 · issued 31 Mar 2006. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forTreasury Team / ALMCompliance TeamSenior Management / BoardInternal AuditRisk Management
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Financial Inclusion & Priority Sector
RRBs Get One-Year Extension on MTM Exemption for SLR SecuritiesSmall Account Rules for Co-operative Banks – RBI Circular 2011RRB CRR Hiked to 9% from Aug 30, 2008CRR Hiked for RRBs by 50 bps in Two StagesRRBs: PMLA Compliance – CTR, STR, and KYC Software Mandate
Browse all departments →

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2799&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—