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
- Review and update your investment portfolio classification and valuation processes to align with the new directions.
- Ensure that your bank's investment policies and procedures are in line with the RBI's guidelines.
- Train your staff on the new directions and ensure that they understand the requirements and implications.
- Conduct a thorough review of your bank's investment portfolio to identify any discrepancies or non-compliance with the new directions.
Who it affects
Commercial banks (excluding Small Finance Banks, Payment Banks, and Local Area Banks)
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.