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AIFs Urge RBI to Relax Investment Cap Norms

Mint Chennai

|

May 26, 2025

The industry wants either a group-wise ceiling or limit relaxed to 25%

- Sneha Shah

Alternative investment funds (AIFs) have urged the banking regulator to ease rules after the central bank capped combined investment by banks, non-bank lenders and other regulated entities into such vehicles, according to four people with knowledge of the development.

The Reserve Bank of India (RBI) last week issued a circular introducing an overall cap, barring entities regulated by it from investing more than 15% in alternative investment funds (AIFs). In case of a ₹100 crore fund, banks, cooperative banks, financial institutions and non-bank financial companies (NBFCs) put together cannot invest more than ₹15 crore. That's a setback for the ecosystem, which has so far depended on domestic financial institutions to raise the bulk of its capital.

AIFs include private equity, venture capital, hedge funds, and other vehicles that invest in alternative assets, such as real estate, startups, and infrastructure.

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