The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (All India Financial Institutions – Classification, Valuation and Operation of Investment Portfolio) Directions, 2025.
The following has been stated namely: -
• It mandates that all regulated financial institutions categorise their investment portfolios into clearly-defined buckets—such as Held to Maturity (HTM), Available for Sale (AFS) and Fair Value through Profit or Loss (FVTPL)—and apply uniform valuation norms consistent with global best practices.
• The direction emphasises that transfers between categories must be justified and disclosed transparently, restricting arbitrary re-classification aimed at cosmetic gains.
• The guidelines require institutions to mark to market certain holdings, make provisions for potential losses, and ensure any recognised gains or losses are reflected symmetrically in their financial statements.
• They also require institutions to document their investment policies, audit their portfolios and disclose methodologies and assumptions used in valuation to bolster transparency.
• Lastly, institutions are directed to adhere to these norms from the specified effective date and ensure proper disclosure of transitional adjustments in their financial statements.
• This shall come into force from November 28, 2025.
[Notification no. - RBI/DOR/2025-26/329 DOR.MRG.REC.No.248/00-00-017/2025-26]
