Third Amendment Directions, 2026 enhance clarity on fair valuation of investments for commercial banks.
RBI Tightens Investment Portfolio Rules for Commercial Banks
The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Third Amendment Directions, 2026, effective September 22, 2026. These amend Chapter IX of the 2025 Directions to ensure clarity and uniformity in the fair valuation of investments.
The amendment reinforces requirements for market-consistent pricing, independent validation, and disclosures in financial statements. It targets inconsistencies observed during audits and inspections, particularly in the treatment of debt securities and equity holdings.
Legal teams in commercial banks must ensure updated internal policies reflect these changes. The directions are part of RBI's broader push toward higher financial reporting standards and risk transparency in the banking sector.