RBI issues Medium Term Framework for investment by FPI in government securities

Apr 21, 2020 | by Avantis RegTech Legal Research Team


Finance & Taxation Compliance

The Reserve Bank of India (RBI) on April 15, 2020, issues Medium Term Framework for investment by FPI in government securities. The limits for FPI investment in Government securities (G-secs) and State Development Loans (SDLs) shall remain unchanged at 6% and 2%, respectively, of outstanding stocks of securities for Financial Year 2020-21. As per the RBI Circular dated March 30, 2020, all investments by eligible investors in the specified securities will be under the Fully Accessible Route (FAR) and all the existing FPI investments in the specified securities shall be reckoned under the FAR. 

The calculation of outstanding stock of G-secs and utilization levels of limits under the MTF has accordingly been adjusted. The allocation of incremental changes in the G-sec limit over the ‘General’ and ‘Long-term’ categories shall be retained at 50:50 for FY 2020-21.

RBI has revised the prescribed limit for the Half yearly (April – September 2020 and October 2020 – March 2021).

[RBI Notification No. A.P. (DIR Series) Circular No. 30]


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