- Overview of Funding Boost for Lohum
Lohum’s Series B round sees a significant injection of $14.5 million, fortifying its position and prospects for growth in the market. - RBI’s Response to Stakeholder Feedback
The Reserve Bank of India (RBI) responds to industry feedback by revising its circular on regulated entities’ (RE) investments in alternative investment funds (AIFs). These adjustments aim to ensure consistency in implementation and address concerns raised by stakeholders. - Background on RBI’s Initial Circular
Introduced in December 2023, the circular sought to regulate investments by banks, non-bank lenders, and other REs in the AIF sector. It was prompted by apprehensions about AIF investments being used for loan restructuring, potentially concealing non-performing assets. - Key Revisions in the Circular
Under the updated circular, regulated entities (REs) are no longer obligated to set aside provisions covering the entirety of their investments in Alternative Investment Funds (AIFs). This adjustment eases the profit impact on entities and provides much-needed flexibility.
- Clarifications and Exclusions
The modified circular excludes investments in equity shares of the debtor company from the category of “downstream investments,” offering clarity in this aspect. Additionally, it specifies that investments in AIFs through intermediaries like fund of funds or mutual funds fall outside its scope. - Response from Industry Stakeholders
Gopal Srinivasan, Chairman of TVS Capital Fund, lauds the RBI’s clarifications, emphasizing the importance of the guidance on AIF investments and fund of funds. His positive reception underscores the significance of these revisions for market players.
By streamlining regulations and providing clear guidelines, the RBI’s revised circular enhances transparency and flexibility in the AIF investment landscape, fostering a conducive environment for growth and innovation.