The RBI had previously issued Circulars dated December 19, 2023, and March 27, 2024, prescribing regulatory guidelines for investment by its REs, such as banks and non-banking financial companies ('NBFCs') in AIFs (collectively referred to as 'RBI-AIF Guidelines'). On April 21, 2025, RBI has released a draft framework proposing following amendments to the RBI-AIF Guidelines:
- RE's investment individually to be capped at 10% of corpus, and all REs collectively at 15%; and
- In case of an RE contributing more than 5% of corpus of an AIF, which also has downstream investment (excluding equity instruments) in a debtor company of the RE, such RE will be required to make 100% provision to the extent of its pro rata share in the investment by such AIF in the debtor company.
Originally published 29 July 2025.
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