India explores new ways to bring bad loan burden under control
A new category of Alternative Investments Funds (AIFs) have been considered which will allow investors to buy stressed assets (NPAs) directly from banks and non-banking financial companies. Presently, investors can access stressed assets only through Asset Reconstruction Companies (ARCs). This initiative will give foreign investors including global hedge funds easier access to the huge pile of bad debts.
AIFs established or incorporated in India are those investment funds which collect funds from Indian and foreign investors, pooled those collected funds through an investment vehicle, and invest it in accordance with the defined investment policy for the benefit of its investors. Examples of AIFs are Venture Capital Funds, Infrastructure Funds, Private Equity Funds, and Hedge Funds etc.
