Master Direction – Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023
The Reserve Bank of India has issued directions for the classification, valuation, and operation of investment portfolios of commercial banks. These directions are applicable to all commercial banks, including regional rural banks and local area banks.
The directions define various terms related to investment portfolios, including “active market”, “approved securities”, “associate”, “carrying cost”, and others. These definitions are essential for understanding the classification, valuation, and operation of investment portfolios.
The directions also outline the effective date, applicability, and scope of the master direction. The master direction is divided into chapters, with the first chapter covering preliminary aspects such as short title, effective date, applicability, and definitions.
The directions provide a comprehensive framework for commercial banks to manage their investment portfolios, including the classification, valuation, and operation of financial assets and liabilities. The framework is based on fair value, observable inputs, and other relevant factors.
The master direction is a crucial document for commercial banks, as it provides guidance on the management of their investment portfolios and ensures that they operate in a prudent and transparent manner.
Chat with the Master Direction: