Investment Fluctuation Reserve (IFR) requirement recently removed by RBI was primarily applicable to which of the following?

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The correct answer is Option A: Commercial banks. RBI removed the Investment Fluctuation Reserve (IFR) requirement for commercial banks on 8 April 2026 under revised investment portfolio directions. IFR was earlier maintained as a buffer against depreciation in the value of banks’ investment portfolios, especially government securities. The outstanding IFR balances are classified as Tier 1 capital under Basel capital norms. IFR balances are to be transferred to Statutory Reserve, General Reserve, or Profit and Loss Account. RBI stated that existing market risk capital charges and valuation norms provide sufficient prudential safeguards. The reform is linked to investment portfolio classification, valuation, and operational framework for banks. The IFR-related framework also applies to commercial banks, cooperative banks, small finance banks, and payments banks. CRAR (Capital to Risk-weighted Assets Ratio) remains a key banking solvency indicator under RBI norms. The RBI reform is part of broader strengthening of banking capital adequacy and prudential regulation framework.

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Public distribution system

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Cooperative societies

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Insurance companies

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Mutual funds

Investment Fluctuation Reserve (IFR) requirement recently removed by RBI was primarily applicable to which of the following?

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Investment Fluctuation Reserve (IFR) requirement recently removed by RBI was primarily applicable to which of the following?

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