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RRBs get one-year MTM exemption extension for SLR securities

No longer current — replaced by RRB Branch Licensing and Forex Business Liberalised
Source: Reserve Bank of India · RBI/2005-06/64 · issued 15 Jul 2005 · ~1 min read
Quick answerRBI extended the exemption from mark-to-market norms for RRBs' SLR securities by one more year to FY 2005-06, allowing them to classify the entire SLR portfolio under Held to Maturity and value it at book cost with premium amortisation.

What changed

The exemption from mark-to-market valuation for RRBs' investments in SLR securities, which was earlier granted up to FY 2004-05, has been extended for FY 2005-06. RRBs can now classify their entire SLR securities portfolio under Held to Maturity for this financial year, valuing it at book value and amortising any premium over the remaining life of the securities.

What it means for you

This extension gives RRBs relief from market volatility in their SLR portfolios for another year, simplifying valuation and reducing the need for frequent provisioning. It allows RRBs to maintain stable book values, which can support their capital adequacy and earnings stability, especially for smaller banks with limited treasury expertise.

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 does 'mark to market' exemption mean for RRBs?

It means RRBs do not have to revalue their SLR securities to current market prices for accounting purposes. Instead, they can hold them at book value, which avoids recognising temporary market losses in their profit and loss statements.

Can RRBs still sell securities classified under Held to Maturity?

The circular does not address sale restrictions. Typically, HTM securities are held till maturity, but any sale may require regulatory approval or trigger reclassification rules. RRBs should refer to broader RBI guidelines on HTM classification.

📜 This document’s life story (3 recorded events, each backed by RBI’s own words)
Extended by RRBs get one-year extension on SLR securities MTM exemption
RBI’s words: “the exemption granted to RRBs up to the financial year 2005-06 from 'mark to market' norms”
Superseded by RRB Branch Licensing and Forex Business Liberalised
RBI’s words: “Cf. our Master Circular RPCD,CO.RRB.No.BL.BC.19/03.05.90-A/ 2005-06 dated July 15, 2005”
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2796: RPCD.RRB.BC.No.20/03.05.34/2005-06 — "Valuation of Investment in SLR / Approved Securities by Regional Rural Banks (RRBs)" dated July 15, 2005”
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/64 RPCD.RRB.BC.No.20/03.05.34/2005-06 July 15, 2005 The Chairmen All Regional Rural Banks/Sponsor Banks Dear Sir/Madam, Valuation of investment in SLR/Approved Securities by Regional Rural Banks (RRBs) Please refer to our circular RPCD.RRB.BCNo.83//03.05.34/2003-04 dated May 20, 2004 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 2004-05 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 2005-06. Accordingly, RRBs will have the freedom to classify their entire investment portfolio of SLR securities under 'Held to Maturity' for the financial year 2005-06 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/2005-06/64 · issued 15 Jul 2005. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2376&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.
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