AIF Diktat: RBI may extend deadline for banks, DFIs
Reserve Bank of India (RBI) to give some relief to mainstream banks and development financiers on downstream loan-linked Alternative Investment Fund (AIF) exposures, which they were required to either liquidate by later this week or totally provide for in compliance with the central bank’s December 19 prudential directive.
Non-banking financial companies (NBFC), however, are unlikely to be provided any relief by the RBI, with industry sources saying the primary goal of the original directive was to de-risk AIF exposures of NBFCs with downstream loan relationships with AIF beneficiaries, and prevent potential evergreening of doubtful advances to struggling corporates.
“The RBI is unlikely to provide NBFCs exemptions on compliance, but banks and other financial institutions are likely to get relief,” said a banking industry source close to the development. January 18 is the liquidation deadline for under-scanner AIF exposures by banks, NBFCs, and development financial institutions (DFI), which primarily advance funds to MSMEs.
A spokesperson at the RBI did not respond to ET’s requests for comment.
Data compiled by the capital-markets regulator, the Securities and Exchange Board of India (Sebi), showed that funds raised by AIFs have risen to Rs 3.74 lakh crore by the end of FY23, from Rs 2.30 lakh crore in FY20.
