More Stories

Informist, Tuesday, Jul. 29, 2025

 

Please click here to read all liners published on this story

--RBI releases directions on investment in AIFs 
--RBI: Directions on investment in AIFs to be effective from Jan 1 
--RBI: Suitable provisions shall govern bks, cos' investments in AIF scheme 
--RBI: No bk, co shall individually contribute over 10% of AIF scheme corpus 
--RBI:Bks, cos total contribution in AIF to not be over 20% of scheme corpus

 

NEW DELHI – The Reserve Bank of India has capped the contribution by a single regulated entity to any alternative investment fund scheme to 10% of the scheme's corpus. Collectively, a ceiling of 20% will be applied to investment by all regulated entities in an alternative investment scheme, the RBI said in a notification Tuesday.

 

The central bank's directions on investment in alternative investment funds will come into force from Jan. 1, the RBI said. The central bank has set a general requirement that an entity's investment policy will have suitable provisions governing its investments in an alternate investment fund scheme.

 

The RBI in May has released draft directions on investment in such funds. In the draft guidelines, the central bank has proposed a ceiling of 15% on collective contribution from all regulated entities in an alternative investment fund scheme.

 

"If a RE (regulated entity) contributes more than 5% 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 shall 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 Tuesday said. 

 

If a regulated entity's contribution is in the form of subordinated units, then it shall deduct the entire investment from its capital funds proportionately from both Tier-1 and Tier-2 capital, the RBI said. Outstanding investments or commitments made with prior approval from the RBI are exempted from the investment limits. The RBI, in consultation with the government, may also exempt certain funds from the scope of these directions, it said.  End

 

Reported by Shubham Rana

Edited by Tanima Banerjee

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.