No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2011-12/65 · issued 01 Jul 2011 · ~1 min read
Quick answerRBI consolidated and updated prudential norms for classification, valuation, and operation of banks' investment portfolios, effective July 1, 2011. This master circular replaces the 2010 version and includes all instructions issued up to June 30, 2011.
The rule, in the simplest words
Banks must classify their investments into three categories: Held to Maturity (HTM), Available for Sale (AFS), and Held for Trading (HFT).
Banks must follow specific valuation methods for each category, and ensure that all investment transactions comply with the prescribed audit and reporting requirements.
Banks must have a board-approved investment policy and internal controls in place to ensure compliance with the prudential norms.
How it plays out — a real example
A treasury officer in Indore, Mr. Kumar, ensures that the bank's investment portfolio is classified correctly and valued according to the RBI's prudential norms. He reviews the bank's investment policy and internal controls to ensure compliance, and trains the treasury and risk management teams on the updated norms.
What changed
RBI issued an updated master circular on prudential norms for investment portfolios, incorporating guidelines issued between July 1, 2010 and June 30, 2011. The previous master circular from July 1, 2010 was replaced. The circular applies to all commercial banks except Regional Rural Banks.
What it means for you
Banks must ensure their investment policies and practices align with the updated norms, covering classification into Held to Maturity, Available for Sale, and Held for Trading categories, along with valuation methods. The circular reinforces the need for board-approved investment policies and internal controls. Non-compliance could affect capital adequacy and provisioning.
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 2011 master circular.
Ensure classification of securities (HTM, AFS, HFT) and valuation methods comply with the updated norms.
Verify that all investment transactions, including non-SLR and government securities, follow the prescribed audit and reporting requirements.
Train treasury and risk management teams on the updated prudential norms and shifting rules between categories.
Who it affects
All commercial banks (excluding RRBs), Treasury departments, Risk management teams, Internal audit and compliance functions, Board of directors (for policy approval)
❓ Common questions
Regulatory timeline
Stated effective dateeffective July 1, 2011
Decoded by BankPulse2026-06-19 00:51 IST
Status change: superseded2026-07-13T04:47:15
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this master circular replace the 2010 version?
Yes, it supersedes the master circular dated July 1, 2010, and includes all instructions issued up to June 30, 2011.
Are Regional Rural Banks covered under this circular?
No, the circular explicitly excludes Regional Rural Banks from its scope.
What are the key areas covered in the circular?
It covers investment policy, classification of securities (HTM, AFS, HFT), valuation norms, non-performing investments, and accounting for repo/non-repo transactions.
📜 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/2011-12/65
DBOD No. BP. BC. 19/21.04.141/2011-12
July 1, 2011
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.18 / 21.04.141/ 2010-11 dated July 1, 2010 , containing consolidated instructions/guidelines issued to banks till June 30, 2010, 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, 2010 and June 30, 2011, 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,
(Deepak Singhal)
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/2011-12/65 · issued 01 Jul 2011. The plain-English explanation above is BankPulse’s own independent summary.
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.
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=6518&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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