The RBI has issued a series of amendment directions in 2026 to refine the classification, valuation, and operation of investment portfolios across commercial, small finance, payments, local area, and all India financial institutions.
RBI Amends Investment Portfolio Rules for Banks
On September 22, 2026, the Reserve Bank of India issued multiple amendment directions to update the framework governing the classification, valuation, and operation of investment portfolios for various financial institutions. Amendments were issued for Commercial Banks (Third Amendment), Small Finance Banks (Second Amendment), Payments Banks (Second Amendment), Local Area Banks (Second Amendment), and All India Financial Institutions (Amendment Directions).
The changes build upon the foundational Directions issued on November 28, 2025, and aim to ensure clarity, fair valuation practices, and uniformity in market treatment of financial instruments. Specifically, Chapter IX (fair valuation of investments) and Chapter VI (market value of investments) have been revised to reflect evolving market conditions and supervisory expectations.
Banking and financial regulation practitioners must review the updated chapters with their clients’ finance and treasury teams. The amendments affect profit recognition, provisioning, asset-liability management (ALM), and audit reporting. Legal teams should assist in updating board reports and internal policies to reflect revised valuation methodologies and disclosure requirements.