RBI has released a second amendment to the directions regarding the classification, valuation, and operation of urban co-operative banks' investment portfolios. The amendment clarifies guidelines on the investment in non-SLR securities.
Second Amendment to Urban Co-operative Banks Investment Directions
On September 2, 2026, the Reserve Bank of India issued the second amendment (RBI/2026-27/249) to the Urban Co-operative Banks (Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025. This amendment emphasizes important clarifications concerning urban co-operative banks' investments in non-SLR securities.
The RBI stressed its commitment to ensure that urban co-operative banks maintain the integrity and soundness of their investment portfolios, ensuring compliance with revised legislative frameworks. This is crucial for regulating risks associated with financial operations and maintaining stability within the banking sector.
With this amendment, urban co-operative banks are required to follow stricter guidelines on the classification and valuation of their investments, which aims to mitigate potential financial risks arising from market fluctuations.
Practitioners should take note of these amendments as they bear implications for compliance, investment decisions, and risk management strategies employed by urban co-operative banks.
Citations
- RBI/2026-27/249 DOR.MRG.REC.No.217/00-00-011/2026-27