What changed
RBI consolidated and updated investment portfolio rules for RCBs into a single direction, replacing previous versions. Key changes include refined definitions for credit ratings, clearer categorization of permanent and current investments, and updated prudential limits for non-SLR securities and broker engagements.
What it means for you
RCBs must align their investment policies and operations with these new directions, ensuring board-approved policies cover all aspects. Banks need to review their classification of investments, valuation methods, and internal controls to comply with stricter norms on rating validity and broker limits.
What you must do
- Review and update your board-approved investment policy to align with the new directions.
- Reclassify all investments into permanent or current categories as per Chapter IV.
- Ensure all credit ratings used are current (letter ≤1 month, rationale ≤1 year old) for rated securities.
- Set up or strengthen internal control systems for investment operations and broker empanelment.
- Prepare for half-yearly reviews and reporting as per Chapter IX.
Who it affects
State Co-operative Banks, Central Co-operative Banks, Rural Co-operative Banks (RCBs), Board of Directors of RCBs, Investment and compliance teams at RCBs
What is the effective date of these directions?
The directions came into effect from the date of issue, November 28, 2025, as per the original issuance; however, the document was updated as on May 18, 2026.