RBI introduces a Fully Accessible Route for Investment by Non-residents in Government Securities

Apr 01, 2020 | by Avantis RegTech Legal Research Team

Finance & Taxation Compliance

The Reserve Bank of India (RBI) on March 30, 2020, has introduced a Fully Accessible Route for Investment by Non-residents in Government Securities. This route shall enable non-residents to invest in specified Government of India dated securities. The eligible investors can invest in specified Government securities without any investment ceilings.

This scheme shall operate along with the two existing routes:-

• Medium Term Framework (MTF), and 

• Voluntary Retention Route (VRR)

The followings are the features of FAR:-

1. There shall be no quantitative limit on investment by eligible investors in the specified securities.

2. Existing investments by eligible investors in specified securities shall be reckoned under the FAR.

3. FPIs, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other entities permitted to invest in Government Securities under the Debt Regulations can invest under this route as hitherto under existing arrangements.

4. Other eligible investors may invest through International Central Securities Depositories.

5. FPIs who currently hold investments in the specified securities shall readjust their investments under the MTF within 1 year from the date on which the FAR comes into effect.

These directions shall come into effect from April 01, 2020.

[Notification No. A.P. (DIR Series) Circular No. 25] 


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