20 June 2024 Punjab Khabarnama : The Indian government has asked the central bank to exempt sovereign funds from a recent set of tightened rules concerning investments in alternate investment funds (AIFs), according to two government sources and a fund official.
In December, the Reserve Bank of India (RBI) asked banks and non-banking financial companies to raise provisions for AIF investments – under which sovereign funds also fall – if they were also lenders to the projects in which the AIFs were investing.
The rules, tightened to prevent evergreening of loans, were partially eased later in March.
The government has written to the RBI seeking special dispensation for sovereign-backed funds – including a fund called Special Window for Affordable and Mid-Income Housing (SWAMIH) set up to rescue stressed real estate projects, citing its “socio-economic purpose”, the two government sources said.
A fund official confirmed the government’s communication with the central bank but did not provide more details. They requested anonymity as they are not authorised to talk to the media.