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

Apr 11, 2018 | by Avantis RegTech Legal Research Team

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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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