Borrowing
Regulation 25
Borrowing
IFSCA (Fund Management) Regulations, 2025Amended in 2026Chapter III · Schemes for Fund Management
Chapter III · Schemes for Fund Management
Regulation 25 – Borrowing
Amended 2026 about 3 min
Venture Capital schemes: Structure, eligible investors, permissible investments and the FME's own contribution for VC schemes.
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In plain English
A VC may borrow or use leverage only within limits and disclosure conditions to be specified/applicable under the regulations.
In plain English
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The rule, in its own words
Read the exact text of Regulation 25
25. A Venture Capital scheme may borrow funds or engage in leveraging activities, subject to the following conditions:- (a) The maximum leverage by the scheme, along with the methodology for calculation of leverage, shall be disclosed in the placement memorandum; (b) The leverage shall be exercised in accordance with the disclosures in the placement memorandum and any deviation therefrom shall be subject to consent of two-thirds (2/3rd) of the investors by value; and (c) The FME intending to employ leverage shall have a comprehensive risk management framework appropriate to the size, complexity and risk profile of the scheme.
Statutory text — Principal Regulations, 2025, consolidated as amended up to 10 September 2026 (including the Second Amendment, 2026). The notified Gazette text prevails. Tap a highlighted word for how it functions.
Amendment history (2 notes)
Footnotes from the consolidated text. They record earlier wording and are not operative law.
- 8 Inserted by the International Financial Services Centres Authority (Fund Management) (Second Amendment) Regulations, 2026, w.e.f. September 10, 2026.
- 9 Substituted by the International Financial Services Centres Authority (Fund Management) (Second Amendment) Regulations, 2026, w.e.f. September 10, 2026. Prior to the substitution, it read as- “(2) The FME shall ensure that the Net Asset Value (NAV) is disclosed to the investors at least on a yearly basis within such time period as disclosed in the placement memorandum of the scheme. (3) The FME shall ensure that the portfolio under the scheme is disclosed to the investors at least on a yearly basis and not later than one (1) month of the end of each financial year.”
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Exceptions and conditions
Taken from the wording of this provision — the carve-outs and conditions worth reading closely.
A Venture Capital scheme may borrow funds or engage in leveraging activities, subject to the following conditions:- (a) The maximum leverage by the scheme, along with the methodology for calculation of leverage, shall be disclosed in the placement memorandum
(b) The leverage shall be exercised in accordance with the disclosures in the placement memorandum and any deviation therefrom shall be subject to consent of two-thirds (2/3rd) of the investors by value
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What this means in practice
Compliance actions
- Applies to
- Venture Capital scheme
- Frequency
- Event-driven
- Evidence
- Borrowing/leverage disclosure in PM
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Where it connects
Read alongside
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Check yourself
Quiz Centre
Test yourself on Regulation 25
3 questions in the unified bank test this regulation. Each explains every option and cites the provision.
A Venture Capital scheme may borrow only within the limits and disclosure conditions applicable under the regulations.
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Your notes
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Venture Capital schemes