RBI Invites Public Comments on Investment Fluctuation Reserve Amendment Directions
Summary
RBI released draft Amendment Directions on Investment Fluctuation Reserve (IFR) covering 10 categories of banks, including Commercial Banks, Small Finance Banks, Payments Banks, Co-operative Banks, and Regional Rural Banks. The amendments address operational challenges in maintaining IFR above regulatory thresholds and differences across prudential frameworks. Public comments are invited until April 29, 2026.
What changed
The RBI has released draft Amendment Directions modifying extant instructions on Investment Fluctuation Reserve for multiple bank categories. The amendments address operational challenges banks face in maintaining IFR above the regulatory threshold on a continuous basis, as well as differences in prudential frameworks applicable across various bank types.
Banks and stakeholders should review the proposed changes and submit feedback by April 29, 2026. The amendments will affect how banks compute and maintain IFR requirements, with implications for capital adequacy and investment portfolio operations. Banks should assess the impact on their risk management and regulatory compliance frameworks.
What to do next
- Review RBI's 10 draft Amendment Directions on IFR requirements
- Submit comments via Connect 2 Regulate by April 29, 2026
- Assess impact on IFR computation and capital buffer maintenance
Archived snapshot
Apr 9, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Press Releases
| () | |
| Date : Apr 08, 2026 | |
| RBI invites public comments on the draft Amendment Directions on ‘Investment Fluctuation Reserve’ | |
| | Reserve Bank of India today placed on its website the following draft Amendment Directions which modify the extant instructions on Investment Fluctuation Reserve (IFR) for various categories of banks:
1. [Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4958)
2. [Reserve Bank of India (Small Finance Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4959)
3. [Reserve Bank of India (Payments Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4960);
4. [Reserve Bank of India (Local Area Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4961);
5. [Reserve Bank of India (Urban Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4962);
6. [Reserve Bank of India (Rural Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4963);
7. [Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4964);
8. [Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4965);
9. [Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Sixth Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4966); and
10. [Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Third Amendment Directions, 2026](https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4967).
The comments on the draft Amendment Directions are invited from the banks and other stakeholders till Apr 29, 2026. The comments / feedback may be submitted through the link under the ‘Connect 2 Regulate’ Section available on the Reserve Bank’s website or may alternatively be forwarded to:
The Chief General Manager
Market Risk Group
Department of Regulation, Central Office
Reserve Bank of India, 12th Floor
Shahid Bhagat Singh Marg
Fort Mumbai – 400 001
Or
by email
With the subject line "Feedback on Draft Amendment Directions on Investment Fluctuation Reserve"
Background and Objective
The extant instructions require various categories of banks to maintain, on a continuous basis, a minimum level of IFR, computed in terms of the portion of their investment portfolio subject to mark-to-market requirements. Taking note of the operational challenges faced by banks in maintaining IFR above the regulatory threshold on a continuous basis as well as of the differences in the prudential frameworks applicable across various bank categories, the Reserve Bank has comprehensively reviewed the extant instructions. Accordingly, it is 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 banks 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 banks, thereby eliminating existing inconsistencies and enhancing regulatory clarity.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/44 | | Reserve Bank of India today placed on its website the following draft Amendment Directions which modify the extant instructions on Investment Fluctuation Reserve (IFR) for various categories of banks:
- Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Small Finance Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Payments Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Local Area Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Urban Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Rural Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026;
- Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Sixth Amendment Directions, 2026; and
- Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Third Amendment Directions, 2026. The comments on the draft Amendment Directions are invited from the banks and other stakeholders till Apr 29, 2026. The comments / feedback may be submitted through the link under the ‘Connect 2 Regulate’ Section available on the Reserve Bank’s website or may alternatively be forwarded to:
The Chief General Manager
Market Risk Group
Department of Regulation, Central Office
Reserve Bank of India, 12th Floor
Shahid Bhagat Singh Marg
Fort Mumbai – 400 001
Or
by email
With the subject line "Feedback on Draft Amendment Directions on Investment Fluctuation Reserve"
Background and Objective
The extant instructions require various categories of banks to maintain, on a continuous basis, a minimum level of IFR, computed in terms of the portion of their investment portfolio subject to mark-to-market requirements. Taking note of the operational challenges faced by banks in maintaining IFR above the regulatory threshold on a continuous basis as well as of the differences in the prudential frameworks applicable across various bank categories, the Reserve Bank has comprehensively reviewed the extant instructions. Accordingly, it is 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 banks 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 banks, thereby eliminating existing inconsistencies and enhancing regulatory clarity.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/44 |
| Reserve Bank of India today placed on its website the following draft Amendment Directions which modify the extant instructions on Investment Fluctuation Reserve (IFR) for various categories of banks:
- Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Small Finance Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Payments Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Local Area Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Urban Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Rural Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Regional Rural Banks - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026;
- Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026;
- Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Sixth Amendment Directions, 2026; and
- Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Third Amendment Directions, 2026. The comments on the draft Amendment Directions are invited from the banks and other stakeholders till Apr 29, 2026. The comments / feedback may be submitted through the link under the ‘Connect 2 Regulate’ Section available on the Reserve Bank’s website or may alternatively be forwarded to:
The Chief General Manager
Market Risk Group
Department of Regulation, Central Office
Reserve Bank of India, 12th Floor
Shahid Bhagat Singh Marg
Fort Mumbai – 400 001
Or
by email
With the subject line "Feedback on Draft Amendment Directions on Investment Fluctuation Reserve"
Background and Objective
The extant instructions require various categories of banks to maintain, on a continuous basis, a minimum level of IFR, computed in terms of the portion of their investment portfolio subject to mark-to-market requirements. Taking note of the operational challenges faced by banks in maintaining IFR above the regulatory threshold on a continuous basis as well as of the differences in the prudential frameworks applicable across various bank categories, the Reserve Bank has comprehensively reviewed the extant instructions. Accordingly, it is 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 banks 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 banks, thereby eliminating existing inconsistencies and enhancing regulatory clarity.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/44 | |
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
Archives
Named provisions
Related changes
Get daily alerts for RBI Press Releases
Daily digest delivered to your inbox.
Free. Unsubscribe anytime.
About this page
Every important government, regulator, and court update from around the world. One place. Real-time. Free. Our mission
Source document text, dates, docket IDs, and authority are extracted directly from RBI.
The plain-English summary, classification, and "what to do next" steps are AI-generated from the original text. Cite the source document, not the AI analysis.
Classification
Who this affects
Taxonomy
Browse Categories
Get alerts for this source
We'll email you when RBI Press Releases publishes new changes.
Subscribed!
Optional. Filters your digest to exactly the updates that matter to you.