Distressed loans: AIF route for global funds

Sebi-registered special situation funds, a type of alternative investment fund (AIF), will be permitted to purchase and sell distressed loans - an arena dominated by asset reconstruction companies, banks, and finance companies. This proposed development has the potential to reshape the stressed asset landscape by bringing in foreign capital, given that AIFs operate without stringent capital requirements and are subject to more relaxed regulations compared to entities regulated by RBI.

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