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Kim & Khloe Kardashian Take a Joyride in Mumbai | Sisters to Film Ambani Wedding for Their Reality Show?

Welcome To Latest IND >> Fastest World News Jul 12, 2024, 05:02PM ISTSource: etimes.inKim and Khloe Kardashian are currently in Mumbai to attend Anant...
HomeBusinessRBI relaxes alternate fund norms for lenders

RBI relaxes alternate fund norms for lenders

MUMBAI: RBI has relaxed its earlier norms on alternate

investment funds

, which required

lenders

to make full provisions for their investments in

AIFs

if the fund invested in a company that the bank lent to.
Under the revised norms, provisioning is required only for the portion of the bank or finance company’s investment in the AIF scheme that is further invested in the debtor company, and not the entire investment in the AIF scheme as required earlier.

Also, investment by lenders in AIFs through intermediaries such as fund of funds or mutual funds are not affected.
In Dec 2023, RBI had asked

banks

to fully provide for investments in AIFs, which went on to invest in

companies

that the banks had lent to. The rules were aimed at preventing ‘evergreening’ – an underhand practice where lenders provide more funds to the borrower to repay instalments so that the loans do not have to be classified as bad loans.
“The exclusion of equity shares from the definition of downstream investments works only for investments in listed companies. It fails to account for private equity and venture capital investments which are in the form of compulsory convertible instruments such as CCPS and CCDs. The industry is debating as to whether they would need to convert all their hybrid secured to equity to allow REs to stay invested in their funds,” said Siddarth Pai, co-chair, Indian Venture and Alternate Capital Association.