Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2023

Summary:

The Reserve Bank of India has issued revised directions on the classification, valuation, and operation of investment portfolios of commercial banks. The revised directions, effective from April 1, 2024, aim to enhance the quality of banks' financial reporting, improve disclosures, and strengthen the overall risk management framework of banks. Key changes include principle-based classification of investment portfolios, tightening of regulations on transfers to/from the held-to-maturity category, and symmetric recognition of gains and losses. The revised directions also align with global financial reporting standards and retain important prudential safeguards to ensure the reliability of valuation.