Home › Circulars › RBI/2010-11/50

Master Circular: Prudential Norms for Bank Investment Portfolios (2010)

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2010-11/50 · issued 01 Jul 2010 · ~2 min read

Quick answerRBI consolidated and updated prudential norms for classification, valuation, and operation of banks' investment portfolios as of July 1, 2010, superseding the 2009 master circular. All commercial banks (excluding RRBs) must comply with these updated guidelines.

The rule, in the simplest words

Banks must sort their investments into three buckets: 'Hold Till End' (keep until it matures), 'Ready to Sell' (can sell anytime), and 'Bought to Sell Soon' (trade often).
Every investment must be valued (priced) the right way, even if it's not traded on a market, and any profit or loss must be recorded correctly.
Banks must follow these rules for all reports to RBI and to keep enough capital (money set aside for safety).
The bank's board (top bosses) must approve the investment policy, and treasury and compliance teams must be trained on these rules.

How it plays out — a real example

A treasury officer in Indore reviews the bank's investment portfolio and notices some bonds are still marked as 'Hold Till End' even though the bank plans to sell them next month. She reminds the treasury team to reclassify those bonds into 'Ready to Sell' so the valuation and profit reporting follow RBI's updated master circular, keeping the bank compliant.

What changed

This master circular updates the July 1, 2009 version by incorporating all instructions and guidelines issued between July 1, 2009 and June 30, 2010. It consolidates the latest prudential norms for classification, valuation, and operation of investment portfolios into a single reference document.

What it means for you

Banks must ensure their investment policies and practices align with the updated norms, including classification of securities into Held to Maturity, Available for Sale, and Held for Trading categories. Valuation methods and income recognition rules are reinforced, impacting how banks report investment gains and losses. Compliance with these norms is essential for regulatory reporting and capital adequacy.

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

Review and update your bank's internal investment policy to align with the updated master circular.
Ensure classification of all investment securities follows the prescribed categories (HTM, AFS, HFT).
Verify valuation practices for both SLR and non-SLR securities, including unquoted instruments.
Train treasury and compliance teams on the updated norms, especially for repo transactions and income recognition.
Maintain proper documentation and audit trails for all investment transactions.

Who it affects

All commercial banks (excluding Regional Rural Banks), Treasury departments, Risk management teams, Compliance and audit functions, Board of directors (for policy approval)

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 05:44 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: superseded 2026-07-13T04:47:15

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

Does this master circular replace all previous investment portfolio guidelines?

Yes, it consolidates and updates all instructions issued up to June 30, 2010, superseding the July 1, 2009 master circular. However, banks should refer to the 2021 directions for current applicability.

What are the key categories for classifying investment securities?

Securities must be classified as Held to Maturity (HTM), Available for Sale (AFS), or Held for Trading (HFT), with specific rules for shifting between categories.

Are Primary Dealer activities covered under this circular?

Yes, banks with PD businesses must include PD activities in their investment policy, but PD business is limited to government securities dealing, underwriting, and market-making.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #1649: DBOD.No.BP.BC.18/21.04.141/2010-11 — "Master Circular - Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks" dated J”

📜 Read the original circular — full text as issued by RBI

The guidelines have become redundant. Please refer to Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2021 .
 RBI/2010-11/50
 DBOD No. BP. BC. 18/ 21.04.141 / 2010-11
 July 1, 2010
 All Commercial Banks
 (excluding Regional Rural Banks) 
 Dear Sir,
 Master Circular – Prudential norms for classification,
 valuation and operation of investment portfolio by banks 
 Please refer to the Master Circular No. DBOD. BP. BC.3 / 21.04.141/ 2009-10 dated July 1, 2009 , containing consolidated instructions/guidelines issued to banks till June 30, 2009, on matters relating to prudential norms for classification, valuation and operation of investment portfolio by banks. The above Master Circular has since been suitably updated by incorporating instructions/guidelines issued between July 1, 2009 and June 30, 2010, and furnished in the Annex. This updated version has also been placed on the RBI web-site ( http://www.rbi.org.in ).
 2.   An Appendix containing a list of circulars referred for the purpose of the current Master circular is furnished at the end of the Annex.
 Yours faithfully,
 (B.Mahapatra)
 Chief General Manager-in-Charge
 Encl: As above
 Annex 
 MASTER CIRCULAR – PRUDENTIAL NORMS FOR CLASSIFICATION, 
 VALUATION AND OPERATION OF INVESTMENT PORTFOLIO BY BANKS 
 Table of Contents 
 1.

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/50 · issued 01 Jul 2010. The plain-English explanation above is BankPulse’s own independent summary.

🧰 Tools — save, print, templates & related

Most relevant forTreasury Team / ALM Compliance Team Risk Management Internal Audit Senior Management / Board Data Science / Analytics

🛠 Banker’s toolkit — checklists & reply templates →

Related circulars · Department of Regulation

SFB Pillar 3 Disclosure Norms Aligned with Basel UCB Deposit Rate Disclosure & Uniformity Rules Updated LAB Deposit Rate Disclosure & Uniformity Rules Tightened Payments Banks: Interest Rates Must Match Disclosed Schedule RBI Updates Bulk Deposit Rate Rules and Disclosure Timing

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 03 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=5770&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.