Page 58 - Banking Finance May 2025

FEATURES

means that investors, even experienced ones, may be pushed report periodic NAV (Net Asset Value) updates, ensuring
into complex and high cost funds without fully understanding greater transparency in valuation.
the implications.
Strengthen accredited investor models: SEBI should tighten
Strengthening Regulations eligibility criteria for AIF investors, ensuring that only those
with adequate financial literacy and risk tolerance
While tax clarity has been achieved, the regulatory
participate in high-risk products; investment advisors and
framework governing AIFs needs immediate reform. SEBI
distributors should be held accountable for due diligence,
must step in to ensure that AIFs evolve into a transparent,
ensuring that only suitable investors are on boarded.
investor friendly asset class.
Mandate full fee and cost disclosures: AIFs must be required The Way Forward

to disclose all management fees, carried interest, and hidden The Budget's tax clarity was an essential step, but it must
costs upfront, similar to global best practices; and investors be followed by strong regulatory oversight to protect
should have a clear cost comparison across different AIF investors.
categories to make informed decisions.
SEBI must act decisively to address transparency issues,
Introduce strict distributor incentive regulations: Upfront distributor misalignment, and the lack of standardised
and trail commissions should be capped or replaced with a performance disclosures. Without these reforms, AIFs will
fee based advisory model to eliminate conflicts of interest; continue to favour fund managers and intermediaries,
and mandatory investor suitability assessments should be eroding trust in what should be a robust and dynamic
implemented to ensure AIFs are sold to those who investment class.
understand the risks.
With the right policies, India's AIF industry can evolve into a
Standardise performance reporting and benchmarking: SEBI world-class alternative investment market that attracts
must introduce mandatory performance reporting institutional capital while ensuring fair treatment for
standards, including risk adjusted return metrics and investors. The Finance Ministry has done its job - now, it's
appropriate benchmarks; and AIFs should be required to SEBI's turn to step up. (Source: BusinessLine)

Rs 2000 notes worth Rs 6,266 cr still in circulation after

withdrawal 2 yrs ago
The high value Rs 2000 notes worth Rs 6,266 crore are still in circulation after two years of the Reserve Bank with-
drawing the currency, according to official data. The Rs 2000 banknotes continue to be legal tender. On May 19,
2023, the Reserve Bank of India (RBI) announced the withdrawal of Rs 2000 denomination banknotes from circula-
tion.
In a statement on Friday, the RBI said the total value of Rs 2000 banknotes in circulation, which was Rs 3.56 lakh
crore at the close of business on May 19, 2023, when the withdrawal was announced, declined to Rs 6,266 crore at
the close of business on April 30, 2025. "Thus, 98.24 per cent of the Rs 2000 banknotes in circulation as on May 19,
2023, have since been returned," the central bank said.

The facility for deposit and/or exchange of such banknotes was available at all bank branches till October 7, 2023.
However, this facility is still available at the 19 issue offices of the Reserve Bank.
Since October 9, 2023, RBI issue offices are also accepting Rs 2000 banknotes from individuals and entities for de-
posit into their bank accounts. Further, people can also send Rs 2000 banknotes through India Post from any post
office within the country to any of the RBI issue offices for credit to their bank accounts.

52 | 2025 | MAY | BANKING FINANCE