According to two government sources and a fund official, the Indian government has requested that the central bank exempt sovereign funds from a recent set of stricter regulations regarding alternate investment funds (AIFs) investments.
The Reserve Bank of India (RBI) requested in December that banks and non-banking financial institutions, if they were also lenders to the projects in which the AIFs were investing, make provisions for AIF investments, including sovereign funds
While acknowledging that the government had communicated with the central bank, a fund official withheld further information. Since they are not authorized to speak with the media, they asked to remain anonymous.
When Reuters emailed the RBI and the finance ministry for comments, they did not reply immediately.
SWAMIH, designed in 2019 to offer debt financing for stalled housing projects, is run by SBICAP Ventures, a fully owned subsidiary of the State Bank of India, a government-owned organization.
SBI is another significant fund investor. For the year ending March 31, 2024, the bank made provisions against its AIF investments totaling Rs 120 crore, or $14.37 million.
According to the first government source, the RBI has informed the government that removing SWAMIH from the AIF regulations would necessitate a similar exemption for foreign sovereign funds.
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