RBI Update - Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026

The Reserve Bank of India has issued the Reserve Bank of India (Regional Rural Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026, with immediate effect, revising the framework relating to Investment Fluctuation Reserve (IFR) for Regional Rural Banks (RRBs). RBI has amended paragraph 104 to provide that RRBs shall create IFR out of realised gains on sale of investments, subject to availability of net profit, until the IFR balance reaches at least 2% of the HFT and AFS investment portfolio, with the minimum requirement to be assessed annually based on the book value of investments in AFS and HFT categories as on the balance sheet date.