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RBI proposes relaxing rules for investments in AIFs

May 19, 2025
Banking & Finance
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The Reserve Bank of India (RBI) is considering easing investment norms for regulated entities (REs) in alternative investment funds (AIFs), following earlier restrictions aimed at financial discipline. A draft proposal suggests capping a single RE’s contribution to an AIF scheme at 10% of its corpus, with a 15% ceiling for all RE investments in a scheme. The Reserve Bank of India has proposed relaxing norms for investments in alternate investment firms by regulated entities (REs) in the aftermath of its earlier tightening bringing in financial discipline, it said in a release on Monday.

In December 2023, the RBI had barred REs, including banks and non-banking finance companies (NBFCs) from investing in alternate investment funds (AIFs) that have investments in existing and recent borrowers. In a draft proposal released, it said a single RE’s contribution to any alternate investment fund (AIF) scheme shall be capped at 10% of its corpus while a ceiling of 15% would apply for investments by all RE’s in an AIF scheme. It also added that RBI may exempt certain AIFs in consultation with the Government, which have been set up for strategic purposes.

Source : https://economictimes.indiatimes.com/news/economy/policy/rbi-proposes-relaxing-rules-for-investments-in-aifs/articleshow/121269381.cms?from=mdr

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