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 and valuation of investments.
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 guidance on the classification, valuation, and operation of investment portfolios, including the treatment of gains and losses, derecognition, and fair value measurement. The directions also cover the accounting and disclosure requirements for investment portfolios.
The master direction is a comprehensive guide for commercial banks to manage their investment portfolios effectively and ensure compliance with regulatory requirements.
Chat with the Master Direction: