The RBI has barred bank and non-bank lenders from investing in alternative investment funds that have exposure to the debtors or borrowers of these lenders.
If banks or NBFCs have such investments in AIFs, they have been given 30 days to liquidate their holdings or make 100% provisions against them.
The move, according to the RBI, is aimed at curbing "evergreening" of loans. According to NDTV Profit's conversations, deals worth Rs 20,000-25,000 crore may be hit.
NDTV Profit explains what the new rules means:
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