In the wake of continuing rise in bond yields, the Reserve Bank today allowed banks to spread their mark-to-market (MTM) losses for the June quarter as well.
In April, RBI had given banks an option to spread provisioning for MTM losses recorded on their investment portfolio during the quarters ended December 2017 and March 2018.
The central bank had also asked banks to build an Investment Fluctuation Reserve (IFR) of 2 per cent of their holdings in the Available for sale (AFS) and Held for Trading (HFT) categories to build up adequate reserves to protect against increase in yields in future