The Reserve Bank of India has issued various Amendment Directions, 2026 revising the Investment Fluctuation Reserve (IFR) framework for different categories of banks under the Investment Portfolio Directions, 2025. RBI has discontinued the IFR requirement for Commercial Banks and Local Area
Banks with effect from May 18, 2026, requiring transfer of existing IFR balances to reserves or Profit & Loss Account, while for Small Finance Banks and Payments Banks, IFR is to be maintained at a minimum of 2% of the AFS and FVTPL/HFT portfolio out of realised gains subject to net profit
availability. Further, Urban Co-operative Banks are required to maintain a minimum IFR of 5% of their HFT and AFS investment portfolio, with flexibility to maintain higher reserves and utilise excess IFR balances for credit to the Profit & Loss Account.
