India’s alternate investment fund (AIF) industry faces severe regulatory challenges, primarily from the Reserve Bank of India (RBI), risking its viability. RBI’s recent circulars, particularly one banning banks from investing in AIFs with exposure to certain debtors, have led to significant financial losses and stagnation of funds like SWAMIH. The lack of consultation and abrupt regulatory changes, including restrictions on partly paid units, further complicate compliance for AIFs. Despite their potential to drive economic growth and job creation, AIFs are overwhelmed by excessive regulations, causing a decline in capital attraction and investor interest, with calls for government intervention to address these issues.