What changed
RBI has issued directions for Payments Banks on investment portfolio classification, valuation, and operation to ensure prudent risk management and regulatory compliance. The directions outline the framework for investment policy, categorization of investments, and operational guidelines.
What it means for you
These directions will help Payments Banks to manage their investment portfolios prudently, ensure regulatory compliance, and maintain the stability of the financial system. It will also help in preventing potential risks associated with investments and ensure that the banks maintain a healthy capital adequacy ratio.
What you must do
- Classify investments into Held To Maturity (HTM), Available for Sale (AFS), Fair Value through Profit and Loss (FVTPL), and Investments in Associates and Joint Ventures
- Value investments at fair value, except for HTM investments which are valued at cost or amortized cost
- Operate investment portfolio in accordance with the approved investment policy framework
- Maintain a robust internal control system for investment operations
- Engage brokers and auditors as per the guidelines
Who it affects
Payments Banks
What is the effective date of these directions?
These directions come into effect from the date of issue, which is November 28, 2025.
What is the purpose of these directions?
The purpose of these directions is to ensure prudent risk management and regulatory compliance by Payments Banks in their investment portfolio operations.
What are the key changes introduced by these directions?
The key changes introduced by these directions include the classification of investments, valuation of investments, and operational guidelines for investment portfolio operations.