As per RBI guidelines for investment by banks in AIFs,

Solution

Investment in Alternative Investment Fund / Real Estate Investment Trust / Infrastructure Investment Trust  by banks: • At the bank level, no bank may contribute more than 10% of the corpus of any AIF scheme; • A bank group may make an investment of less than 20% in the corpus of Category I or Category II AIF scheme, without prior approval of RBI • A bank group may make an investment of 20% or more but not exceeding 30% in the corpus of Category I or II AIF scheme, with prior approval of the Reserve Bank.  • No bank shall make any investment in the corpus of Category III AIF scheme. Investment by a bank’s subsidiary in the corpus of Category III AIF scheme shall also be restricted to the regulatory minima prescribed by SEBI.  • Additionally, banks shall ensure that their exposure in an investee company through their investments in AIF schemes does not result in circumvention of any regulations applicable to banks.  • No bank shall make an investment of more than 10% in the unit capital of a Real Estate Investment Trust/Infrastructure Investment Trust within the overall ceiling of 20% of the bank’s net worth permitted for all direct investments in shares, convertible bonds/ debentures, units of equity-oriented mutual funds and exposures to AIFs.