Where such investments (including the leverage) is below a threshold and do not constitute a significant share (less than 20 per cent of the fund) or where the bank has not lent its name or is not involved in the management, no specific regulatory requirement is being envisaged other than such investment remaining within the overall capital market exposure limit and maintenance of appropriate capital.
However, where a bank lends it name directly or indirectly or floats / manages large private pools of capital, there is a need to have additional capital requirements to take care of reputation, concentration and other risks not captured in the traditional framework. This is the reason why we are looking at bringing out guidance on banks managing large private pools of capital.