GIFT City Funds Request Government to Reconsider RBI's Foreign Asset Reporting Requirement

Government Intervention Sought for Alternative Investment Funds

The Alternative Investment Funds Association of India (AIFAI), a body representing alternative investment funds (AIFs) at the GIFT International Financial Services Centre (IFSC), has requested the government to intervene in a recent decision made by the Reserve Bank of India (RBI). The RBI, in a move announced in late March, has mandated that AIFs must be treated as 'resident Indians' when reporting foreign assets.

This new requirement has raised concerns among AIFs, who rely heavily on foreign investments to grow their portfolios. The RBI's decision is expected to impact the operations of AIFs, which could lead to a decline in the overall investment landscape. AIFs are a crucial component of the Indian economy, providing investors with opportunities to diversify their portfolios and invest in alternative assets such as private equity, real estate, and hedge funds.

The AIFAI has requested the government to reconsider the RBI's decision, citing the potential negative impact on the industry. The association has argued that the new requirement could lead to a decrease in foreign investment, ultimately affecting the growth of the Indian economy.

| Quarter | AIF Assets Under Management (AUM) | Change from Previous Quarter | | --- | --- | --- | | Q1 2022 | ₹1,43,911 crore | - | | Q2 2022 | ₹1,55,119 crore | 7.4% | | Q3 2022 | ₹1,63,421 crore | 5.7% | | Q4 2022 | ₹1,71,819 crore | 4.9% | | Q1 2023 | ₹1,80,219 crore | 4.8% |

The AIFAI has requested the government to reconsider the RBI's decision, citing the potential negative impact on the industry. The association has argued that the new requirement could lead to a decrease in foreign investment, ultimately affecting the growth of the Indian economy.