The Reserve Bank of India (RBI), on May 18, 2026, issued Amendment Directions revising the regulatory framework relating to Investment Fluctuation Reserve (IFR) applicable to various categories of banks and regulated entities. The amendments follow stakeholder feedback received on draft directions proposing rationalisation and harmonisation of IFR requirements across banking entities.
Under the revised framework, RBI has dispensed with the IFR requirement for bank categories maintaining capital charge for market risk and complying with the revised norms on classification, valuation and operation of investment portfolios. For other regulated entities, the requirement to maintain IFR will now apply only as on balance sheet dates instead of on a continuous basis. The amendments also harmonise IFR-related provisions across different regulated entities to remove inconsistencies and improve regulatory clarity.
Accordingly, RBI issued multiple amendment directions covering commercial banks, small finance banks, payments banks, local area banks, urban and rural co-operative banks, and regional rural banks. The changes also extend to prudential norms on capital adequacy and financial statement presentation and disclosure requirements for certain banking categories.
[Press Release: 2026-2027/284]
