RBI revises Investment Limits for Foreign Portfolio Investors (FPI) in Government Securities

Apr 11, 2018 | by Avantis RegTech Legal Research Team

The Reserve Bank of India (RBI) vide circular dated April 06, 2018 has decided to revise the investment limits for Foreign Portfolio Investors (FPI) in Government Securities as under:-

(a)    The limit for FPI investment in Central Government securities (G-Secs) would be increased by 0.5% each year to 5.5% of outstanding stock of securities in 2018- 19 and 6% of outstanding stock of securities in 2019-20.

(b)   The limit for FPI investment in State Development Loans (SDLs) would remain unchanged at 2% of outstanding stock of securities.

(c)    The overall limit for FPI investment in corporate bonds will be fixed at 9% of outstanding stock of corporate bonds. All the existing sub-categories under the category of corporate bonds will be discontinued and there would be a single limit for FPI investment in all types of corporate bonds.

(d)   The allocation of increase in G-sec limit over the two sub-categories – ‘General’ and ‘Long-term’ – remains at the current ratio of 25:75. However, based on an assessment of investment interest, this ratio has been re-set at 50:50 for the year 2018-19.

[RBI/2017-18/150 A.P. (DIR Series) Circular No. 22]

URL: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/150FPID91F710E2F064296AEE2FA3A04416B0D.PDF


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