RBI Grants Exemption to SWAMIH Fund from Investment Limits for Regulated Entities

The Reserve Bank of India (RBI) has decided to enlist the SWAMIH (Special Window for Affordable and Mid-Income Housing) Investment Fund-I under the “specified exemption category” for investments by Regulated Entities (REs) such as banks and financial institutions.

Key Points:

• Implication:
  • Investments made by REs in SWAMIH will not be subject to the investment limits and provisioning norms laid out in the RBI (Investment in AIF) Directions, 2025.
  • This move is expected to attract more institutional inflows from the banking sector into the fund.
• About SWAMIH Fund:
  • Announced: November 6, 2019.
  • Structured as an Alternative Investment Fund (AIF) providing priority debt financing for the completion of stalled housing projects, particularly in the affordable and mid-income segments.
  • Investment Manager: SBI Ventures.
  • Fund Size:
    • First Close: ₹10,037.5 crore.
    • Final Close (December 6, 2022): ₹15,530 crore.
• RBI’s AIF Investment Norms (for context):
  • A single Regulated Entity (RE) cannot contribute more than 10% of the corpus of an AIF scheme.
  • The collective contribution by all REs in an AIF cannot exceed 20% of that scheme’s corpus.
  • These restrictions, however, will not apply to SWAMIH Fund-I after the exemption.
• Significance:
  • Enhances liquidity support to stalled real estate projects, boosting homebuyer confidence.
  • Strengthens the affordable housing ecosystem in line with Government of India’s Housing for All initiative.
  • Encourages bank participation in a socially impactful investment vehicle while maintaining regulatory safeguards.

Source: BL