Banks will need to reclassify their investments from the effective date and disclose in the financial statements for FY24, says RBI
Banking & Finance
In a recent move, the Reserve Bank of India (RBI) has issued updated directions for banks regarding the classification, valuation, and operation of their investment portfolios. The revised directions are based on the feedback received on the discussion paper on the subject, which was issued in January 2022. The guidelines, aimed at ensuring transparency and stability in the banking sector, introduce a framework for banks to categorise their investments and specify how they should be valued and managed. The revised directions include principle-based classification of investment portfolio, tightening of regulations around transfers to/from held to maturity (HTM) category and sales out of HTM, inclusion of non-SLR securities in HTM subject to fulfilment of certain conditions and symmetric recognition of gains and losses.
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