RBI issues Amendment Directions on ‘Investment Fluctuation Reserve’

Reserve Bank of India had issued the draft Amendment Directions proposing review of the norms on Investment Fluctuation Reserve (IFR) for various bank categories, seeking feedback from stakeholders. The draft Amendment Directions proposed (i) to dispense with the IFR requirement for bank categories maintaining capital charge for market risk and following the revised norms on classification, valuation, and operation of investment portfolio; (ii) that the remaining Regulated Entity categories shall comply with the IFR requirement as on balance sheet dates instead of on a continuous basis; and (iii) to harmonise certain IFR-related instructions across various categories of Regulated Entities, thereby eliminating existing inconsistencies and enhancing regulatory clarity.

2. Feedback received on the above draft Amendment Directions has been examined and the consequent modifications have been suitably incorporated in the Final Amendment Directions. A statement on the feedback received on the draft Amendment Directions is provided in the Annex.

3. Accordingly, the Reserve Bank of India has today issued the following Amendment Directions:

1. Reserve Bank of India (Commercial Banks – Classification, Valuation, and Operation of Investment Portfolio) Second Amendment Directions, 2026;

2. Reserve Bank of India (Small Finance Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;

3. Reserve Bank of India (Payments Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;

4. Reserve Bank of India (Local Area Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;

5. Reserve Bank of India (Urban Co-operative Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;

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

7. Reserve Bank of India (Regional Rural Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;

8. Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Sixth Amendment Directions, 2026;

9. Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Sixth Amendment Directions, 2026; and

10. Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Third Amendment Directions, 2026.

(Brij Raj)           
Chief General Manager

Press Release: 2026-2027/284