In view of the statutory pre-emption and the long duration of the government securities, banks were permitted to exceed the limit of 25 per cent of total investments under HTM category provided the excess comprised only the SLR securities and the total SLR securities held in the HTM category was not more than 25 per cent of their DTL.
One-time shifting of securities to HTM category was allowed at acquisition cost or book value or market value on the date of transfer, whichever was the least, and the depreciation, if any, on such transfer was required to be fully provided for. These changes recognised the dynamic interface of the banks’ investment portfolio with the interest rate cycles and were counter-cyclical.