SEBI Proposes ‘GARUDA Mechanism’ to Speed Up AIF Scheme Launches

Current Context: SEBI, in its consultation paper dated May 11, 2026, proposed the GARUDA Mechanism (Green-Channel: AIF Rollout Upon Document Acknowledgement) to fast-track the launch of Alternative Investment Fund (AIF) schemes.

• The mechanism aims to reduce regulatory timelines, simplify compliance, and enable faster capital deployment, while ensuring oversight through post-facto risk-based scrutiny.
• For regular AIF schemes, the launch timeline will shrink from 30 days to 10 working days after filing via merchant banker.
• For first-time schemes, launches will be permitted from the date of SEBI registration or 10 working days after filing, whichever is later.
• For Accredited Investor-only schemes and Angel Funds, GARUDA allows immediate launch upon filing, with direct submission to SEBI; CEO and Compliance Officer undertakings will replace merchant banker due diligence certificates.
• This proposal comes at a time when India has 1,849 registered AIFs (March 2026), commitments worth ₹15.74 lakh crore, and a backlog of 183 pending schemes.

Question:

Q.1 What is the full form of GARUDA in SEBI’s proposal?
a) Green Approval Route for Unified Digital Assets
b) Green-Channel: AIF Rollout Upon Document Acknowledgement
c) Growth and Regulation Unit for Domestic Assets
d) Government Approved Route for Unified Deposits and AIFs

Answer: b) GARUDA stands for Green-Channel: AIF Rollout Upon Document Acknowledgement, aimed at speeding up the launch of AIF schemes.