ENA Economy 2024-06-21 16:51:35 <p><span style="font-size:14px"><strong>New Delhi, Jun 21 (KNN)</strong> The Indian government has reportedly requested the Reserve Bank of India (RBI) to exempt sovereign funds from recently tightened regulations concerning investments in alternate investment funds (AIFs), according to sources familiar with the matter.</span></p> <p><span style="font-size:14px">In December, the RBI implemented new rules requiring banks and non-banking financial companies to increase provisions for AIF investments if they were also lenders to projects in which the AIFs were investing. These measures were designed to prevent loan evergreening. The regulations were partially relaxed in March.</span></p> <p><span style="font-size:14px">The government has reportedly communicated with the RBI, seeking special consideration for sovereign-backed funds, including the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund.</span></p> <p><span style="font-size:14px">SWAMIH, established in 2019 to provide debt financing for stalled housing projects, is managed by SBICAP Ventures, a subsidiary of the State Bank of India (SBI).</span></p> <p><span style="font-size:14px">Sources indicate that the government has cited the socio-economic purpose of SWAMIH as a reason for exemption.</span></p> <p><span style="font-size:14px">There are concerns that the new regulations could deter banks from investing in SWAMIH, as they may already have exposure to projects the fund aims to rescue.</span></p> <p><span style="font-size:14px">The RBI has reportedly responded that exempting SWAMIH would necessitate similar treatment for foreign sovereign funds.</span></p> <p><span style="font-size:14px">However, the central bank may consider exemptions on a case-by-case basis, as suggested by the government.</span></p> <p><span style="font-size:14px">SBI, a significant investor in SWAMIH, reported provisions of 1.2 billion rupees against its AIF investments for the fiscal year ending March 31, 2024.</span></p> <p><span style="font-size:14px">As of now, SBICAP Ventures has not provided a comment on the matter. The situation remains developing, with potential implications for sovereign fund investments in India's alternative investment landscape.</span></p> <p><span style="font-size:14px"><em><strong>(KNN Bureau)</strong></em></span></p> 38304 https://knnindia.co.in/news/newsdetails/economy/govt-seeks-exemption-for-sovereign-funds-from-aif-investment-rules 2024-06-21 16:51:35 knnindia.co.in