RBI/2024-25/118 DOS. CO. FMG. SEC. No.5 /23.04.001/2024-25 July 15, 2024 The Chairman / Managing Director / Chief Executive Officer All Commercial Banks (including Regional Rural Banks) All India Financial Institutions (AIFIs)1 Madam / Dear Sir, Master Directions on Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions Please find enclosed as Annex ‘Reserve Bank of India (Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions) Directions, 2024’ issued in exercise of the powers conferred under Chapter III-A and Chapter III-B of the Reserve Bank of India Act, 1934, and Section 21 and Section 35A of the Banking Regulation Act, 1949. These Directions shall supersede the earlier Directions on the subject, namely, the Reserve Bank of India (Frauds - Classification and Reporting by commercial banks and select FIs) Directions 2016 (Ref.DBS.CO.CFMC.BC.No.1/23.04.001/2016-17) dated July 01, 2016 (Updated as on July 03, 2017). Yours faithfully (Rajnish Kumar) Chief General Manager Encl.: as above

RBI/2023-24/107

DoS.CO.CSITEG/SEC.7/31.01.015/2023-24                                    November 7, 2023

The Chairman/Managing Director/Chief Executive Officer

Scheduled Commercial Banks (excluding Regional Rural Banks);

Small Finance Banks; Payments Banks;

Non-Banking Financial Companies;

Credit Information Companies; and

All India Financial Institutions (EXIM Bank, NABARD, NaBFID, NHB and SIDBI)

Madam/Dear Sir,

RBI/DOR/2023-24/104
DOR.MRG.36/21.04.141/2023-24

September 12, 2023

All Commercial Banks (excluding Regional Rural Banks)

Dear Sir / Madam,

Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023

The extant regulatory instructions on classification and valuation of investment portfolio by commercial banks, as contained in the Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2021, are largely based on a framework introduced in October 2000 drawing upon the then prevailing global standards and best practices.

2. In view of the significant developments in the global standards on classification, measurement and valuation of investments, the linkages with the capital adequacy framework as well as progress in the domestic financial markets, a need was felt to review and update these norms. Pursuant to the announcement made in the Statement on Developmental and Regulatory Policies dated December 8, 2021, a discussion paper on the subject was issued for public comments on January 14, 2022. Based on the inputs received, it has now been decided to put in place a revised regulatory framework for the investment portfolio.

3. The revised framework updates the regulatory guidelines with global standards and best practices while introducing a symmetric treatment of fair value gains and losses, a clearly identifiable trading book under Held for Trading (HFT), removing the 90-day ceiling on holding period under HFT, removal of ceilings on Held to Maturity and more detailed disclosures on the investment portfolio. Further, to facilitate smooth implementation, illustrative guidance has been developed on the revised framework and annexed to the Directions.

Applicability

4. The revised framework as detailed in the Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2023 annexed hereto shall be applicable from April 1, 2024, to all Commercial Banks excluding Regional Rural Banks.

5. Reserve Bank of India is issuing these Directions in the exercise of its powers conferred under section 35A of the Banking Regulation Act, 1949, and all the powers enabling it on this behalf.

Yours faithfully,

(Usha Janakiraman)
Chief General Manager

RBI/2023-24/
DOR.MRG.37/21.04.141/2023-24