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Foreign portfolio investment norms
June 19 , 2018
2159 days
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- The Reserve Bank of India (RBI) has eased investment norms for foreign portfolio investors (FPIs) in debt, especially into individual large corporates.
Corporate Bonds
- FPIs are permitted to invest in corporate bonds with minimum residual maturity of above 1 year.
- The short-term investments in corporate bonds by an FPI shall not exceed 20% of total investment of that FPI in corporate bonds.
Government securities
- The FPIs cap on investment in Government securities (G-secs) has been increased to 30% of outstanding stock of that security, from 20% earlier.
- FPIs were allowed to invest in government bonds with a minimum residual maturity of three years.
- FPIs are permitted to invest in G-secs, including treasury bills (T-bills), and SDLs (State Development Loans) without any minimum residual maturity requirement.
- However, it will be subject to condition that short-term investments by FPI under either category shall not exceed 20% of total investment of that FPI in that category.
- In this case, short-term investments are defined as investments with residual maturity up to 1 year.
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