Regulatory Alerts2026-05-18
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Reserve Bank of India (Rural Co-operative Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026
Paragraph 115.(1) of the Reserve Bank of India (Rural Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025, is substituted to require Rural Co-operative Banks (RCBs) to maintain an Investment Fluctuation Reserve (IFR) of not less than 5 per cent of their investment portfolio classified under the Current Category. This minimum requirement is assessed annually and computed with reference to the book value of investments in the Current Category as of the balance sheet date. The Amendment Directions, 2026, come into effect from the date of issue.
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( 182 kb ) Reserve Bank of India (Rural Co-operative Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026
RBI/2026-27/88 DOR.MRG.REC.No.76/00-00-011/2026-27
May 18, 2026
Reserve Bank of India (Rural Co-operative Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026
Please refer to paragraph 115 of Reserve Bank of India (Rural Co-operative 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.
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Accordingly, in exercise of the powers conferred by Section 35A read with Section 56 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.
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(i) These Directions shall be called the Reserve Bank of India (Rural Co-operative Banks – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026.
(ii) These Amendment Directions shall come into effect from the date of issue.
- The Reserve Bank of India (Rural Co-operative Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025 , are amended as provided below.
(i) Paragraph 115.(1) shall be substituted by the following, namely: -
“115.(1) An RCB shall maintain IFR of not less than 5 per cent of its investment portfolio classified under the Current Category. This minimum requirement shall be assessed annually and shall be computed with reference to the book value of its investments in the Current Category as of the balance sheet date.”.
(Sunil T S Nair) Chief General Manager
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