The Reserve Bank of India has issued the Reserve Bank of India (Small Finance Banks – Classification, Valuation and Operation of Investment Portfolio) Second Amendment Directions, 2026, dated September 22, 2026. The amendment specifically addresses the valuation of units of Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) held by Small Finance Banks.
Under the amendment, a new Paragraph 82A has been inserted into the investment-portfolio directions. For unquoted REIT units, valuation will be based on the Net Asset Value (NAV) disclosed by the REIT. If a REIT fails to calculate and disclose NAV in the manner and frequency prescribed under the SEBI REIT Regulations, 2014, its units will be valued at ₹1 for the purposes of the RBI directions. The same ₹1 treatment applies to REIT units classified as infrequently traded under the applicable SEBI regulations. Other unquoted instruments issued by a REIT will continue to be valued according to the methodology prescribed for those instruments.
The amendment comes into effect from September 22, 2026, the date of issue. For Small Finance Banks, the change provides greater clarity and uniformity in investment valuation, particularly where reliable market prices are unavailable. It also reinforces the importance of accurate and timely NAV disclosure by REITs because the prescribed ₹1 valuation can materially affect how such holdings are reflected in a bank’s investment portfolio.
Want to deepen your expertise beyond today’s news?
Explore practical certification courses designed for banking, risk, insurance, compliance, ESG, AI, and emerging technologies professionals.
Learn from industry experts and earn certifications from RMAI and BFSI Sector Skill Council of India.
#Riskmanagementnews
