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RBI Directions on Investment Portfolio for Commercial Banks

Current · Source: Reserve Bank of India · RBI/DOR/2025-26/162 · issued 28 Nov 2025 · ~1 min read
Quick answerRBI issues updated directions on investment portfolio classification, valuation, and operation for commercial banks, effective from November 28, 2025.
The rule, in the simplest words
How it plays out — a real example

Rahul, a treasury officer in Indore, needs to reclassify a gold investment that his bank had previously classified as Available for Sale (AFS). He determines the fair value of the gold investment and adjusts the previous gains or losses, ensuring that the revised carrying value is accurate and in line with the RBI's guidelines.

What changed

The RBI has updated the directions on investment portfolio classification, valuation, and operation for commercial banks, effective from November 28, 2025. The directions cover various aspects, including initial recognition, subsequent measurement, reclassifications, sale of investments, fair value of investments, operational guidelines, income recognition, asset classification, and provisioning.

What it means for you

These directions aim to ensure that commercial banks maintain a healthy and transparent investment portfolio, which is essential for their stability and growth. The directions provide a framework for banks to classify, value, and operate their investments, ensuring that they adhere to the RBI's guidelines and maintain high standards of financial reporting.

What you must do

Who it affects

Commercial banks (excluding Small Finance Banks, Payment Banks, and Local Area Banks)

❓ 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 effective date of the new directions?

The new directions are effective from November 28, 2025.

Who are the entities covered by the new directions?

The new directions cover commercial banks, banking companies, corresponding new banks, and the State Bank of India.

What are the key changes introduced by the new directions?

The new directions introduce changes in investment portfolio classification, valuation, and operation, including initial recognition, subsequent measurement, reclassifications, sale of investments, fair value of investments, operational guidelines, income recognition, asset classification, and provisioning.

📜 Read the original circular — full text as issued by RBI
The investments are reclassified at their fair value at the reclassification date. However, the cumulative gain / loss previously recognised in the AFS-Reserve shall be withdrawn therefrom and adjusted against the fair value of the investments at the reclassification date to arrive at the revised carrying value. Thus, the revised carrying value shall be the same as if the bank had classified the investment in HTM ab initio itself.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/DOR/2025-26/162 · issued 28 Nov 2025. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Commercial banks (excluding Small Finance Banks, Payment Banks, and Local Area Banks)), your first concrete step on “RBI Directions on Investment Portfolio for Commercial Banks” is: “Review and update your investment portfolio classification and valuation processes to align with the new directions.” (RBI issued this 28 Nov 2025).

  1. Circular: RBI/DOR/2025-26/162 -- RBI Directions on Investment Portfolio for Commercial Banks
  2. Issued: 28 Nov 2025
  3. Action required: Review and update your investment portfolio classification and valuation processes to align with the new directions.
  4. Action required: Ensure that your bank's investment policies and procedures are in line with the RBI's guidelines.
  5. Action required: Train your staff on the new directions and ensure that they understand the requirements and implications.
  6. Action required: Conduct a thorough review of your bank's investment portfolio to identify any discrepancies or non-compliance with the new directions.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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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=13148&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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