Lenders can invest up to 20% of AIF’s corpus at 15% allowed in design guidelines | Photocredit: Wutwhan Photo
The reserve Bank of India relaxed Tuesday standards for the investments of lenders in regulations of alternative investment funds (AIFs), so that an individual credit entity up to 10 percent of the corpus of an AIF scheme can invest and enable all lenders to invest all litters up to 20 percent of an AIF scheme.
If a lender has more than five percent of the corpus of an AIF scheme, which also has power -reducing investments (excluding stock instruments) in a debtor of the lender, the lender must provide 100 percent in the size of his proportional investments in the debtor of the AIF scheme.
Anil Gupta, senior vice-president ICRA, said that the latter guidelines are relaxed because these lenders enable 20 percent of the corpus of AIF to invest compared to 15 percent allowed in design accumulator. Furthermore, in the case of any common exposure between AIF and RE, the provisions required for such investments are proportional to the share of the investment of the lender in AIF Corpus and not 100 percent as required earlier.
According to Gopal Srinivasan, chairman and director of TVS Capital Funds, when banks invest in AIFS, it offers the latter more credibility, in support of both current and future fund increases. From the perspective of a lender, if they observe that an AIF has made high -quality investments in certain companies, the lender can choose to deepen his relationship with those companies through loans, which helps economic growth with systemic stability.
Stock instrument
“The RBI has explicitly stated that ‘Equity instrument’ refers to shares, mandatory convertible preference shares (CCPs) and mandatory convertible bonds (CCD), which offers a greater clarity to the ecosystem, while the regulator in particular the new government of the Governores were the Governores – De Gouvernormen Bowternormen the Governores – the Governoral Governores, the Governoral Former Forms. From the leadership – New guarantees in the light of the Sebi, and has introduced a resilient and sustainable framework, “he said.
Sudhir Chandi, director at Resurent India, says that lenders should strengthen their internal mechanisms to treat investment sport folios with care and close monitoring based on sound investment.
Indications:
Lenders can invest up to 20 percent of AIF’s corpus compared to 15 percent allowed in design guidelines.
2- In the case of any common exposure between AIF and RE, the facilities required for such investments are proportional to the share of the investment of the lender in AIF Corpus, and not 100 percent as required earlier.
3- With relaxed and clear standards, the investments of banks in AIF schemes can rise.
4- Credit providers must strengthen their internal mechanisms to process investment portfolios with care and close close monitoring based on sound investments.
Published July 29, 2025
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