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

The Reserve Bank of India has issued the Reserve Bank of India (Rural Co-operative Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026, with immediate effect, revising the framework relating to Investment Fluctuation Reserve (IFR) for Rural Co-operative Banks (RCBs). RBI has amended paragraph 115(1) to mandate that RCBs shall maintain an IFR of not less than 5% of their investment portfolio classified under the Current Category, with the minimum requirement to be assessed annually based on the book value of such investments as on the balance sheet date.