Reserve Bank of India (Local Area Banks – Asset Liability Management) Directions, 2025
The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Local Area Banks – Asset Liability Management) Directions, 2025.
The following has been stated: -
•The RBI (Local Area Banks – Asset Liability Management) Directions, 2025, set out a comprehensive framework for Local Area Banks to manage liquidity, interest rate, currency, and market risks through robust ALM systems.
•Banks must establish Board-approved policies, limits, and ALCO/management committees to oversee risk measurement, monitoring, and strategic decision-making.
•Daily and periodic reporting of Structural Liquidity, Short-Term Dynamic Liquidity, and Interest Rate Sensitivity statements is mandated, with corrective actions guided by top management.
•The Directions also cover behavioural analysis, embedded options, internal transfer pricing, and regulatory compliance to ensure prudent and transparent balance sheet management.
These directions shall become effective on November 28, 2025.
[Notification No.: RBI/DOR/2025-26/237 DOR.LRG.No.156/13-10-009/2025-26]
