Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026 · RBI/2026-27/89
RBI notification RBI/2026-27/89 · 18 May 2026
RBI notification RBI/2026-27/89 · 18 May 2026
Summary
Check the official recordThe Reserve Bank of India amends the instructions for the Investment Fluctuation Reserve for Regional Rural Banks. Regional Rural Banks must create an Investment Fluctuation Reserve from realized gains on the sale of investments. This requirement applies if net profit is available. The reserve amount must reach at least 2 percent of the Held for Trading and Available for Sale portfolio. Banks must assess this minimum requirement annually. The calculation uses the book value of investments in the Available for Sale and Held for Trading categories as of the balance sheet date. These directions take effect from the date of issue.
What you must do
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RBI/2026-27/89 DOR.MRG.REC.No.77/00-00-001/2026-27 May 18, 2026
Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026
Please refer to paragraph 104 of Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025, dated November 28, 2025, on Investment Fluctuation Reserve (IFR). In view of certain operational constraints being faced by banks in the maintenance of IFR, there is a need to amend the extant instructions.
Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (hereinafter called the Act) and all other laws enabling the Reserve Bank in this regard, the Reserve Bank, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Amendment Directions hereinafter specified.
(i) These Directions shall be called the Reserve Bank of India (Regional Rural Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026.
(ii) These Amendment Directions shall come into effect from the date of issue.
(i) Paragraph 104 shall be substituted by the following, namely: -
"104. An RRB shall create Investment Fluctuation Reserve (IFR) out of the realised gains on sale of investments, subject to the availability of net profit, until the amount of IFR is at least 2 per cent of the HFT and AFS portfolio. This minimum requirement shall be assessed annually and shall be computed with reference to the book value of investments in AFS and HFT categories as of the balance sheet date.".
(Sunil T S Nair) Chief General Manager