RBI Issues Updated Directions on ‘Investment in AIFs’
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- By Chetan Kulasri
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- Last Updated on 27 October, 2025
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Circular no. RBI/DOR/2025-26/138 DOR.STR.REC.43/21.04.048/2025-26; Dated: 24.10.2025
The Reserve Bank of India (RBI) has issued revised directions for regulated entities (REs) investing in Alternative Investment Funds (AIFs). These directions supersede earlier circulars and provide updated regulatory guidance on investment limits.
1. Key Provisions
- Individual RE Investment Cap – Each regulated entity may invest up to 10% of an AIF’s corpus.
- Collective Investment Cap – The aggregate investment by all REs in a single AIF cannot exceed 20% of its corpus.
2. Effective Date
The revised directions are effective from 1st January 2026, and all REs are required to comply with the updated investment caps from this date onward.
3. Objective
These revisions aim to:
- Enhance risk management in AIF investments by regulated entities,
- Prevent concentration risk in any single fund, and
- Promote transparency and prudent investment practices in the alternative investment ecosystem.
Click Here To Read The Full Circular
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