RBI with a view to ensuring uniformity in implementation among the banking entities, and to address the concerns flagged in various representations received from stakeholders, has advised that downstream investments shall not include investments in equity shares of the debtor company of the RE, but shall include all other investments, including investment in hybrid instruments.
Investment by banking entities in the subordinated units of any AIF scheme with a ‘priority distribution model’ shall be subject to full deduction from RE’s capital funds. This shall only be applicable in cases where the AIF does not have any downstream investment in a debtor company of the RE.
