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RBI proposes new norms for classification, valuation of banks' investment portfolio

09:03 PM Jan 14, 2022 | Agencies

The Reserve Bank of India (RBI) proposed new norms for the classification and valuation of the investment portfolio of banks.

The investment portfolio of banks will be divided into three categories held-to-maturity (HTM), available for sale (AFS), and fair value through profit and loss account (FVTPL), according to the proposed norms.

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Within FVTPL, Held for Trading (HFT) shall be a sub-category aligned with the specifications of ‘Trading Book’ as per the Basel III framework.

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The new bank portfolio classification norms will come into effect from April 1, 2023, the RBI said.

The new norms propose to bridge the gap between the existing guidelines and global standards and practices with regards to classification, valuation and operations of the investment portfolio of commercial banks.

(With inputs from PTI)

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