Reserve Bank of India (All India Financial Institutions – Asset Liability Management) Directions, 2025
RBI master-direction RBI/DOR/2025-26/330 · 28 Nov 2025
RBI master-direction RBI/DOR/2025-26/330 · 28 Nov 2025
Summary
Check the official recordThe Reserve Bank of India establishes a framework for All India Financial Institutions (AIFIs) to manage liquidity, interest rate, and foreign exchange risks. AIFIs must implement an Asset Liability Management (ALM) system, including an ALM Information System and an Asset Liability Management Committee (ALCO). The Board holds responsibility for risk management policies and setting prudential limits. AIFIs must prepare a Statement of Liquidity on a fortnightly basis and an Interest Rate Sensitivity statement on a monthly basis. These institutions must submit both statements to the Department of Supervision, Reserve Bank of India, on a quarterly basis. These directions apply to EXIM Bank, NABARD, SIDBI, NHB, and NaBFID.
What you must do
Key dates
Who is affected
Thresholds
RBI/DOR/2025-26/330 DOR.LRG.REC.No.249/13-10-005/2025-26 November 28, 2025
Reserve Bank of India (All India Financial Institutions – Asset Liability Management) Directions, 2025
Table of Contents
Chapter I – Preliminary A. Short Title and Commencement B. Applicability C. Definitions
Chapter II – Role of Board A. Responsibilities of the Board B. Approval of policies, limits, and reviews
Chapter III – Asset Liability Management Governance A. Introduction B. ALM Information System C. ALM Organisation D. Composition of ALCO E. ALM Process
Chapter IV – Liquidity Risk Management A. Management of Liquidity Risk B. Statement of Liquidity
Chapter V – Management of Currency Risk
Chapter VI – Interest Rate Risk Management (IRR) A. Introduction B. Traditional Gap Analysis C. Interest Rate Sensitivity Statement
Chapter VII – General A. Behavioural Pattern and Embedded Options B. Internal Transfer Pricing
Chapter VIII – Monitoring and Reporting A. Preparation and Review of Statements B. Regulatory Reporting and Periodicity of Returns
Chapter IX – Repeal and Other Provisions A. Repeal and Saving B. Application of other laws not barred C. Interpretations
Annex-I: Statement of Liquidity in Indian Rupees Annex-I-A: Statement of Liquidity in Foreign Currency Annex–II: Interest Rate Sensitivity Statement for Rupee Assets and Liabilities - AIFI Annex-II-A: Interest Rate Sensitivity Statement for Foreign Currency Assets and Liabilities Annex III: Maturity Profile for Statement of Liquidity Annex IV: Interest Rate Sensitivity Profile
In exercise of the powers conferred by Section 45L of the Reserve Bank of India Act, 1934, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.
1 These Directions shall be called the Reserve Bank of India (All India Financial Institutions – Asset Liability Management) Directions, 2025.
2 These Directions shall be applicable to All India Financial Institutions (hereinafter collectively referred to as ‘AIFIs’ and individually as an ‘AIFI’), viz., Export Import Bank of India (‘EXIM Bank’), National Bank for Agriculture and Rural Development (‘NABARD’), Small Industries Development Bank of India (‘SIDBI’), National Housing Bank (‘NHB’), and National Bank for Financing Infrastructure and Development (‘NaBFID’).
3 These Directions shall become effective from the date of issue.
4 In these Directions, unless the context otherwise requires, the terms herein shall bear the meaning as assigned to them below:
(1) ‘Interest Rate Risk’ is the risk where changes in market interest rates might adversely affect an AIFI’s financial condition.
(2) ‘Gap’ is the difference between Rate Sensitive Assets (RSA) and Rate Sensitive Liabilities (RSL) for individual time bucket.
(3) ‘Liquidity Risk’ means inability of an AIFI to meet cash and collateral obligations as they become due, without adversely affecting its financial condition.
(4) ‘Stress Test’ means evaluation of the financial position of an AIFI under a severe but plausible scenario to assist in decision making within the AIFI.
5 All other expressions unless defined herein shall have the same meaning as have been assigned to them under the BR Act, the RBI Act, rules / regulations made thereunder, or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be.
6 The Board shall have overall responsibility for management of risks and shall decide the risk management policy of an AIFl and set limits for liquidity, interest rate, exchange rate, and equity price risks. The Board shall constitute a Management Committee or any other specific Committee, that shall oversee the implementation of the Asset Liability Management (ALM) system and review its functioning periodically.
7 The Board shall formulate policy and strategy to manage liquidity risk, including the liquidity risk tolerance.
8 The Board / Asset Liability Management Committee (ALCO) shall approve the volume, composition, maximum maturity / duration, holding, and cut loss limits for the Trading Book. Where the Board is satisfied that the AIFI has necessary risk management capabilities, it shall adopt an integrated Value at Risk (VaR) limit for the entire balance sheet, including the "Banking Book" and the "Trading Book", for the rupee as well as foreign currency portfolio.
9 Where an AIFI has adequate MIS and technical capability, the Board / ALCO shall ensure to move to the modern techniques of Interest Rate Risk measurement like Duration Gap Analysis, Simulation, and Value at Risk
10 The Board / ALCO shall approve internal prudential limits for cumulative negative liquidity gaps across all time buckets.
11 The Board / ALCO shall approve the prudential limits for interest rate gaps in various time buckets. Such limits on interest rate risk shall be set as simple gap limits or in terms of impact on Net Interest Income (NII) / Net Interest Margin (NIM) or Earnings at Risk (EaR) of the AIFI.
12 The Board / ALCO shall approve the classification of components of assets and liabilities in the appropriate time buckets, through reasonable estimation of behavioural patterns, embedded options, and rolls-in and rolls-out based on past data or empirical studies.
13 An AIFI shall establish an ALM framework for measuring, monitoring, and managing liquidity risk, interest rate risk, and foreign exchange risks. The system shall involve the identification and assessment of various types of risks and enable dynamic adjustment of balance sheet items (assets and liabilities) to manage these risks effectively.
14 The ALM system shall introduce a formalised framework for management of market risks through measuring, monitoring and managing liquidity, exchange rate, and interest rate risks of an AIFI that need to be closely integrated with the AIFI’s business strategy. The ALM function shall also endeavour to enforce the discipline of market risk management, viz., managing business after assessing the market risks involved.
15 ALM process rests on following three pillars:
(1) ALM Information System comprising: Management Information System; and Availability, accuracy, adequacy and expediency of information.
(2) ALM Organisation comprising: Structure and responsibilities; and Level of top management involvement.
(3) ALM Process comprising: Risk parameters; Risk identification; Risk measurement; Risk management; and Risk policies and tolerance levels.
16 The ALM framework shall be supported by risk policies and tolerance limits. The Top Management shall ensure the implementation of necessary information system and availability of timely, adequate, and accurate information, which shall be central to the ALM process.
17 An AIFI shall, at a minimum, establish systems sufficient to generate liquidity gap and interest rate gap reports in accordance with these Directions.
18 The Top Management of the AIFI shall be responsible for successful implementation of the risk management framework. The risk management framework shall be integrated with the AIFI’s basic operations and strategic decision-making.
19 An AIFI shall set up an ALCO as a decision-making unit responsible for integrated balance sheet management from a risk-return perspective, including the strategic management of interest rate and liquidity risks. While each AIFI shall define the roles, responsibilities, and powers of its ALCO, its responsibility would normally include:
(1) monitoring the market risk levels of the AIFl by ensuring adherence to the various risk limits set by the Board;
(2) articulating the current interest rate view and a view on future direction of interest rate movements. Future business strategy shall be aligned with the interest rate outlook as also on other parameters considered relevant;