Key Points
reprieve. for some segments from recent directions to prevent the evergreening of loans by routing funds to borrowers through alternate investment funds (AIF)...
Evergreening of loans refers to a practice where a lender provides additional funds or extends the maturity date of an existing loan to a borrower struggling to meet repayment obligations..
RBI also asked lenders to liquidate investments in funds that have invested in their borrowers' companies by one month..
One of the representations received by RBI is that there should be a differentiation between investments made in funds that invest in healthy companies and funds that are created specifically to invest in distressed businesses...
You might be interested in
RBI tightens norms to check evergreening of loans by lenders through AIFs
19, Dec, 23Mumbai, Dec 19 (PTI) In a move to curb “evergreening” of loans, the Reserve Bank on Tuesday barred banks and NBFCs from investing in any scheme of Alternative Investment Funds (AIFs) having investment in companies that have taken loan from the lenders concerned in the past 12 months. Banks and NBFCs, which are Regulated Entities […]
Policymakers open to looking into AIF circular concerns
23, Dec, 23The Indian Venture and Alternate Capital Association (IVCA) lobby group has approached the government, concerned that the measure will impact the flow of funds to the startup sector, ET reported on Friday. The RBI had been keeping a close watch on these practices for the past several months and clamped down after investments rose sharply, said a person familiar with the details.
Mint Explainer: The big fuss about RBI’s AIF circular
25, Dec, 23The central bank’s latest diktat is an example of collaboration between markets regulator Sebi and RBI
RBI governor Shaktikanta Das cautions against evergreening of loans: Are banks, corporates still window-dressing loans?
30, May, 23The process of evergreening of loans, a form of zombie lending, is typically a temporary fix for a bank. If an account turns into a non-performing asset (NPA), banks are required to make higher provisions which will impact their profitability.
RBI cracks down on alternative investment funds misuse
20, Dec, 23India Business News: RBI bars lenders from investing in AIF schemes to prevent 'evergreening' of loans. Evergreening refers to extending a new loan to repay an older debt.
RBI must regulate risky loan apps, cooperative banks. They are plaguing the banking sector
12, Dec, 23The act of banking involves a social responsibility that the banks must honour on their own, without the RBI forcing them to.
Banks to tighten home loan sanctions, increase some EMIs under RBI’s new rules
19, Aug, 23India Business News: Borrower loan eligibility could drop while banks and finance companies will be forced to hike the EMI (equated monthly instalments) for some home loan
HNIs want to invest in AIFs as debt funds lose long-term tax benefits
15, May, 23As the venture ecosystems shifts and evolves, AIFs stand to gain from changes.
Sebi proposes tighter norms for alternate investment funds: Report
19, May, 23A consultation paper suggests that Sebi has said AIFs shall not borrow funds directly or indirectly for the purpose of making investments. Here's all you need to know.