India’s markets regulator, SEBI, has mandated stricter due diligence for fund managers of alternative investment funds (AIFs) to prevent rule circumvention, particularly concerning “evergreening” of stressed loans. AIFs, which invest in various asset classes, must now conduct thorough reviews of large investors. Additionally, investors from neighboring countries require government approval to invest in AIFs. SEBI and the Reserve Bank of India (RBI) have raised concerns about AIFs potentially facilitating the misuse of funds, with investigations into significant amounts being reported. The RBI has subsequently tightened regulations for banks and non-banking financial companies involved with AIFs.