The Reserve Bank of India has issued amendment directions for regional rural banks' investment portfolios, revising the rules on the Investment Fluctuation Reserve in response to operational constraints in maintaining it. Regional rural banks must now create the Investment Fluctuation Reserve out of realised gains on sale of investments, subject to the availability of net profit, until the reserve reaches at least 2 per cent of the held for trading and available for sale portfolio. The 2 per cent minimum will be assessed annually and calculated with reference to the book value of investments in the available for sale and held for trading categories as of the balance sheet date. The amendment replaces paragraph 104 of the 2025 directions on classification, valuation and operation of investment portfolios and takes effect from the date of issue.
Reserve Bank of India2026-05-18
Reserve Bank of India amends regional rural bank IFR rules with annual 2 per cent minimum linked to HFT and AFS portfolios
The Reserve Bank of India has amended its directions on regional rural banks’ investment portfolios, revising the rules on the Investment Fluctuation Reserve. Regional rural banks must now build the reserve from realised gains on sale of investments, subject to net profit, until it reaches at least 2 per cent of the held for trading and available for sale portfolio, assessed annually on the book value as of the balance sheet date.