RBI GUIDELINES LEAVE VCs UNHAPPY

The domestic venture fund industry feels it has been delivered a severe blow by the Reserve Bank of India's (RBI's) guidelines on treatment of banks' investments in venture capital funds (VCFs). The classification of investments in VCFs by banks as exposure to capital market, a higher risk weight of 150 resulting in higher capital allocation and capping on banks' investments at 10 percent of net worth appear as a dead-end for non bank Indian venture funds.