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The Hindu
3 days ago
- Business
- The Hindu
RBI caps investment by banks, NBFCs at 20% of corpus of AIF scheme
The Reserve Bank of India (RBI) has issued revised guidelines capping investment by Regulated Entities (REs) at 20% of the corpus of an Alternative Investment Fund (AIF) scheme. No RE can individually contribute more than 10% of the corpus of an AIF scheme, as per a circular issued by the RBI on Tuesday (July 29, 2025). 'Collective contribution by all REs in any AIF Scheme shall not be more than 20% of the corpus of that scheme,' it added. These Directions will come into force from January 1, 2026, or from any earlier date as decided by a RE as per its internal policy. As per the Directions if a RE contributes more than five per cent of the corpus of an AIF Scheme, which also has downstream investment (excluding equity instruments) in a debtor company of the RE, then the RE will be required to make 100% provision to the extent of its proportionate investment in the debtor company through the AIF Scheme, subject to a maximum of the direct loan and/ or investment exposure of the RE to the debtor company, the RBI said in the circular. If a RE's contribution is in the form of subordinated units, then it will need to deduct the entire investment from its capital funds— proportionately from both Tier-1 and Tier-2 capital (wherever applicable). The REs include Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks), Primary (Urban) Co-operative Banks/ State Co-operative Banks/ Central Co- operative Banks, All-India Financial Institutions and Non-Banking Financial Companies (including Housing Finance Companies). Commenting on this Sudhir Chandi, director at Resurgent India said, 'The new guidelines aim at better governing and strengthening the risk management process under the Investment Portfolio of the regulated entities. The previous guidelines issued in December 2023 and March 2024 have been repealed. ' 'The guidelines are now brought into alignment with SEBI guidelines on due diligence and investment to ensure uniformity and clarity,' he said. 'The guidelines directly seek to address the concern relating to the misuse of the AIF route for evergreening of the loans and advancing by using AIF to finance the existing stress loans portfolio,' he said adding 'By restricting the individual contribution to 10% of the corpus of an AIF, the concentration risk shall be mitigated.' Similarly, the restriction on the collective contribution of all REs will further spread the risk and entail wider participation of more regulated entities, he said. 'The provisioning norms have been further strengthened to 100 percent in specific cases to discourage the higher level of investment in the designated category of existing borrowers,' he said. The idea is to deter any diversion of funds from the alternative investment fund route for wrongful purposes contrary to the best practices of robust income recognition and assets classification, he stated.
Economic Times
3 days ago
- Business
- Economic Times
RBI caps investment by a bank in AIF scheme at 10%
The Reserve Bank on Tuesday capped contributions by a single regulated entity (RE), including banks and NBFCs, at 10 per cent of the corpus of an Alternative Investment Fund (AIF) scheme. ADVERTISEMENT Also, collective contribution by all REs in any AIF Scheme should not be more than 20 per cent of the corpus of that scheme, said the Reserve Bank of India (Investment in AIF) Directions, 2025. REs refer to banks, NBFCs and All-India Financial Institutions. The RBI had issued guidelines in December 2023 and later in March 2024 prescribing the regulatory guidelines in respect of investment by the REs of the Reserve Bank in guidelines have been reviewed, inter alia, taking into account industry feedback as well as the regulations issued by the Securities and Exchange Board of India (Sebi) relating to specific due diligence of investors and investments of AIFs, the RBI said in a circular on Tuesday."No RE shall individually contribute more than 10 per cent of the corpus of an AIF Scheme," the circular said. ADVERTISEMENT Collective contribution by all REs in any AIF Scheme shall not be more than 20 per cent of the corpus of that scheme. "If a RE contributes more than five per cent of the corpus of an AIF Scheme, which also has downstream investment in a debtor company of the RE, then the RE shall be required to make 100 per cent provision to the extent of its proportionate investment in the debtor company through the AIF Scheme, subject to a maximum of the direct loan and/ or investment exposure of the RE to the debtor company," it said. The circular also said the RBI may, in consultation with the government, exempt certain AIFs from the scope of the existing circulars and the revised Directions. PTI (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
3 days ago
- Business
- Time of India
RBI caps investment by a bank in AIF scheme at 10%
The Reserve Bank on Tuesday capped contributions by a single regulated entity (RE), including banks and NBFCs, at 10 per cent of the corpus of an Alternative Investment Fund (AIF) scheme. Also, collective contribution by all REs in any AIF Scheme should not be more than 20 per cent of the corpus of that scheme, said the Reserve Bank of India (Investment in AIF) Directions, 2025. Explore courses from Top Institutes in Please select course: Select a Course Category Healthcare Data Science Finance PGDM MCA Data Science others CXO Cybersecurity Technology Degree Digital Marketing Public Policy Project Management healthcare Data Analytics Others Product Management Design Thinking MBA Operations Management Artificial Intelligence Leadership Management Skills you'll gain: Financial Analysis in Healthcare Financial Management & Investing Strategic Management in Healthcare Process Design & Analysis Duration: 12 Weeks Indian School of Business Certificate Program in Healthcare Management Starts on Jun 13, 2024 Get Details REs refer to banks, NBFCs and All-India Financial Institutions. The RBI had issued guidelines in December 2023 and later in March 2024 prescribing the regulatory guidelines in respect of investment by the REs of the Reserve Bank in AIFs. The guidelines have been reviewed, inter alia, taking into account industry feedback as well as the regulations issued by the Securities and Exchange Board of India (Sebi) relating to specific due diligence of investors and investments of AIFs, the RBI said in a circular on Tuesday. Live Events "No RE shall individually contribute more than 10 per cent of the corpus of an AIF Scheme," the circular said. Collective contribution by all REs in any AIF Scheme shall not be more than 20 per cent of the corpus of that scheme. "If a RE contributes more than five per cent of the corpus of an AIF Scheme, which also has downstream investment in a debtor company of the RE, then the RE shall be required to make 100 per cent provision to the extent of its proportionate investment in the debtor company through the AIF Scheme, subject to a maximum of the direct loan and/ or investment exposure of the RE to the debtor company," it said. The circular also said the RBI may, in consultation with the government, exempt certain AIFs from the scope of the existing circulars and the revised Directions. PTI
News18
3 days ago
- Business
- News18
RBI caps investment by a bank in AIF scheme at 10 pc
Agency: Mumbai, Jul 29 (PTI) The Reserve Bank on Tuesday capped contributions by a single regulated entity (RE), including banks and NBFCs, at 10 per cent of the corpus of an Alternative Investment Fund (AIF) scheme. Also, collective contribution by all REs in any AIF Scheme should not be more than 20 per cent of the corpus of that scheme, said the Reserve Bank of India (Investment in AIF) Directions, 2025. REs refer to banks, NBFCs and All-India Financial Institutions. The RBI had issued guidelines in December 2023 and later in March 2024 prescribing the regulatory guidelines in respect of investment by the REs of the Reserve Bank in AIFs. The guidelines have been reviewed, inter alia, taking into account industry feedback as well as the regulations issued by the Securities and Exchange Board of India (Sebi) relating to specific due diligence of investors and investments of AIFs, the RBI said in a circular on Tuesday. 'No RE shall individually contribute more than 10 per cent of the corpus of an AIF Scheme," the circular said. Collective contribution by all REs in any AIF Scheme shall not be more than 20 per cent of the corpus of that scheme. 'If a RE contributes more than five per cent of the corpus of an AIF Scheme, which also has downstream investment in a debtor company of the RE, then the RE shall be required to make 100 per cent provision to the extent of its proportionate investment in the debtor company through the AIF Scheme, subject to a maximum of the direct loan and/ or investment exposure of the RE to the debtor company," it said. The circular also said the RBI may, in consultation with the government, exempt certain AIFs from the scope of the existing circulars and the revised Directions. PTI NKD NKD MR (This story has not been edited by News18 staff and is published from a syndicated news agency feed - PTI) view comments First Published: July 29, 2025, 19:00 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
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Business Standard
23-06-2025
- Business
- Business Standard
Best of BS Opinion: Startups get a boost, higher education needs a leg-up
Hello and welcome to BS Views, our newsletter that sums up today's opinion page. From Sebi's bold moves to the crisis in higher education, and from sustainability issues with rice farming to Iran's nuclear ambitions, today's pieces touch upon key issues that policymakers must grapple with. The Securities and Exchange Board of India (Sebi) board last week approved a co-investment vehicle (CIV) framework under the Alternative Investment Fund (AIF) regulations, amended rules governing Real Estate Investment Trusts (Reits) and Infrastructure Investment Trusts (InvITs), and eased the delisting process for certain types of public-sector undertakings (PSUs). It also clarified norms on the issuance of employee stock ownership plans (Esops) in start-ups that plan to go public — a move that has brought relief to founders. These reforms, our first editorial argues, will make Indian markets more attractive for listings, improve the business environment for AIFs, and facilitate delisting for eligible PSUs. The latest QS World University Rankings show that India's higher education sector has recorded its best-ever performance on the global stage. Notably, seven of the eight new entrants from India are private universities — a sign of shifting dynamics in the country's higher education architecture. However, our second editorial cautions that quality remains a concern, and centres of higher education continue to face challenges such as faculty shortages, inadequate infrastructure, and underfunding. It calls for fast-tracking the regulatory frameworks recommended under the National Education Policy (NEP), strengthening public institutions, and addressing gaps in industry-academia linkages. Ajay Shah highlights a core principle of political science and international relations — the distinction between the principal and the agent, or the interests of the people versus those of the regime. In this context, he criticises the devastation caused by the Khamenei regime's pursuit of pride and nationalism in Iran. With no existential threats, Shah argues, Iran does not need nuclear weapons. Instead, the country must end state violence, focus on institution-building, and create conditions for peace and prosperity. Surinder Sud welcomes India's rise as the world's largest producer and leading exporter of rice since 2012. While newer rice strains have contributed to this growth, he warns that rice farming severely strains water resources and harms environmental sustainability. He recommends practices such as direct seeding and alternate wetting and drying of paddy fields, which can reduce water use by 30–60 per cent, lower greenhouse gas emissions, and cut fertiliser, pesticide, and labour requirements — all without sacrificing yields. Scaling up such technologies is critical for sustaining long-term rice production. Charles Finch reviews Leigh Claire La Berge's Fake Work: How I Began to Suspect Capitalism Is a Joke, calling it an early autopsy of a post-capitalist world. He observes that younger generations increasingly view capitalism as unsustainable. The book is a sustained meditation on the experience of corporate life — both its weakness and strength. Finch finds it earnest, repetitive, and at times wooden, but notes it is resolutely committed to its thesis. It offers a vision of a different life beyond the workplace — though the implication, he adds, is that only an apocalypse might make that fresh start possible.
