The Reserve Bank of India (RBI), on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks – Asset Liability Management) Directions, 2025.
The following has been amended namely:-
• Responsibilities of the Board:- The Board shall have the overall responsibility for management of risks and shall decide the risk management policy and procedures, set prudential limits, auditing, reporting and review mechanism in respect of liquidity, interest rate, and forex risks.
• Chapter VI, which states, “Interest Rate Risk (IRR) Management”:- Interest rate risk from ‘earnings perspective’ is the immediate impact of interest rate changes on a bank's profits through changes in its spread [Net Interest Income (NII)]. Interest rate risk from ‘economic value perspective’ is the long-term impact of interest rate changes on a bank's Market Value of Equity (MVE) or Net Worth, as the market-to-market value of a bank's assets, liabilities and off-balance sheet positions gets affected due to variation in market rates. The risk from the earnings perspective can be measured as changes in the NII or Net Interest Margin (NIM).
• An RRB shall initially use the Traditional Gap Analysis (TGA) for measuring the Interest Rate Risk.
[Notification no. RBI/DOR/2025-26/261 DOR.LRG.REC.No.180/13-10-008/2025-26]
