Reserve Bank of India (Non-Banking Financial Companies – Classification, Valuation and Operation of Investment Portfolio) Directions, 2025 (Updated as on July 01, 2026)

1. Investment rules for NBFCs

This paper sets how non-banking financial companies must class and value what they hold.

2. Start date

These Directions came into effect on the day RBI issued them.

3. Who is covered

These Directions apply to every non-banking financial company.

4. Carrying cost defined

Carrying cost is the book value of the asset plus interest earned but not received.

5. Current investment means a year

A current investment is one easily sold and meant to be held for a year or less.

1. No ad-hoc transfer

A move between classes may not be made on an ad-hoc basis.

2. No setting one off another

A fall in one scrip may not be set off against a rise in another on transfer.

3. No setting group off group

A fall in one group may not be set off against a rise in another.

4. One rupee if no accounts

Where the investee's balance sheet is missing for two years, the share is valued at ₹1.

BankPulse example. A finance company holds shares in a company that has not filed its balance sheet for two years. Those shares are valued at 1 rupee only, whatever was paid for them.

5. Board frames the policy

The Board must frame the investment policy and put it into practice.

6. Trade through a gilt account

Government securities must be dealt through a gilt or demat account RBI allows.

7. Fifteen minutes to report

An over the counter corporate bond trade must be reported within fifteen minutes.

8. Net fall must be provided

Where a group's market value is below its cost, the net fall is charged to profit.

9. Transfer at the lower value

A move between classes is made scrip by scrip at book or market value, whichever is lower.

10. Six groups for valuing

Quoted current investments are grouped into six kinds before they are valued.

11. Lower of cost or market

Each group of quoted current investments is valued at cost or market, whichever is lower.

12. Scrip by scrip, then add

Within a group each scrip is taken on its own and the totals then added.

13. Unquoted shares at the lower

An unquoted equity share is valued at cost or break-up value, whichever is lower.

14. Unquoted preference at the lower

An unquoted preference share is valued at cost or face value, whichever is lower.

15. Government paper at carrying cost

Unquoted government or guaranteed paper is valued at carrying cost.

16. Mutual fund at NAV

An unquoted mutual fund unit is valued at the scheme's declared net asset value.

17. Long-term follows the standard

A long-term holding is valued as the accounting standards require.

18. Unquoted debenture is a loan

An unquoted debenture is treated as a term loan or other credit for grading.

19. Dividend on cash basis

Dividend income on shares and mutual fund units is taken on a cash basis.

20. Unless it is declared

Dividend may be taken on accrual once declared at the annual general meeting.

21. Bond interest on accrual

Interest on corporate bonds and government paper is taken on an accrual basis.

22. Only if serviced on time

That accrual holds only where the rate is fixed and interest is not in arrears.

1. Older rules cancelled

This cancels the older RBI rules on how banks classify and value their investment portfolio.

2. Old actions preserved

Actions already taken under the old rules still follow those old rules.