Mumbai: The reserve bank of India proposes to cap a single registered entity’s (re) Contribution to any alternative investment funds (AIF) at 10 per cent of per cent of its corpus whose corpus will collectively Investment by all res in an aif scheme, in the revised draft directs is issued on Monday.
Regulated entities like banks, pension funds, and insurance companies often investment in aifs for diversification. The RBI Revised Draft Directions, AIMED at Tightening Oversight and Preventing Potential Mise of the Investment Route, also stipulate that investments by an re of up to five per cent to five per corpus of an aif SCCHME Allowed without any restriction.
However, if the investment by any exceeds five per cent of the corpus of the scheme, and if the scheme has a downstream debt investment in a debtor company of the re (excluding equity shares, Compulsorilly Conversion Preference shares, and compulsorily convertible debents), then the re will be required to make 100 per cent providers to the extent of its proportionate exposure.
The proposals further state that RBI May Exempt Certain Aifs, in Consultation with the government, that have been set up for strategic purposes. The revised directions are issued by the rbi will be applicable properly. Existing Investments or Commitments will follow the extant norms, according to the official statement.
Explaining the rationale for the new directions, the rbi said: “on a review, it is observed that regulatory measures measures measures undertake Regarding their investment in aifs. ”
Besides, “sebi have also issued guidelines required inter alia Specific due Diligence with Respect to Investors and Investments of the AIFS, to Prevent Facilitation of Circumvement of Circumvention Frameworks”, Statement added.
The comments on the draft directions have been invited from the public/stakeholders Till June 8, 2025. Comments may be submitted through the link under the link under the ‘Connect 2 Regulate RBI’s website or may alternatively be forwarded to the Chief General Manager, Credit Risk Group of the RBI.