Agent Information Software, Inc. (OTCMKTS:AIFS – Get Free Report)’s stock price rose 2.7% during mid-day trading on Thursday . The company traded as high as $1.90 and last traded at $1.90. Approximately 852 shares traded hands during trading, a decline of 55% from the average daily volume of 1,899 shares. The stock had previously closed […]
Alternative Investment Funds are privately managed funds with just a few investors, usually wealthy family offices, banks, NBFCs and other institutions and even corporate treasuries. These funds usually invest in high-yielding debt instruments and structure transactions in a complex way that helps hide the genuine nature of the financial strength of the borrower.
RBI has noticed investments by regulated institutions (REs including Banks, NBFCs, and FIs) in AIFs, who have also funded companies that have taken loans from RE.
A Reserve Bank of India (RBI) circular issued Tuesday prohibits banks and NBFCs from investing in AIFs to prevent questionable asset transfers. This will affect large banks and NBFCs involved in AIF investments. "This RBI measure imposes significant requirements on banks and NBFCs," said Sai Krishna Bharathan, Partner, Trilegal.
HFCs could see some pressure to either divest or fully provide for some assets as some of them have investments in AIFs, and those funds have invested in real estate companies. "It may also significantly impact the existing investments from the likes of banks, NBFCs and Sidbi in several AIFs," said Tejesh Chitlangi, Senior Partner, IC Universal Legal.