Bank investments in AIFs to get same treatment as VCFs: RBI

Reserve Bank of India has clarified that investments by commercial banks in Alternate Investment Funds (AIFs) category-I and II will get the same prudential treatment applicable to investment in Venture Capital Funds. This was in response to queries from banks on applicability of the prudential treatment for investment in VCFs to investment in AIFs. According to RBI norms for valuation of investments, the quoted equity shares / bonds/ units of VCFs in the bank's portfolio should be marked to market preferably on a daily basis, but at least on a weekly basis. As for unquoted shares/bonds/units of VCFs, they are transferred from Held to Maturity to Available for Sale (AFS) category after completion of three years and are valued differently.