PEL set to Provision 3164 crores
136ba0a5-62c1-48c7-be58-8f1dd2fa2c60.pdf (302.5 KB)
In the midst of concerns about the circumvention of regulations by alternative investment funds (AIFs), the RBI issued an advisory on Tuesday to banks and financial companies to curb the evergreening of loans and misuse of the AIF route.
RBI restricted banks, NBFCs and HFCs from investing in units of AIFs that have downstream investment either directly or indirectly in a debtor firm where the lender had exposure anytime during the prior 12 months. Investment by the lender in subordinated units of AIF with a priority/structured distribution model shall be subject to full deduction from the lender’s capital.