Relaxation in FII in Debt Secs
- The Reserve Bank of India (RBI) has notified certain relaxations in the rules for FII in debt
- The investment limit in Government Securities (G-Secs) by Foreign
Institutional Investors (FIIs) and long-term investors has been
enhanced by $5 billion to $25 billion from current $20 billion.
- The investment limit in corporate bonds by FIIs has also been increased by $5 billion $50 billion from current $45 billion.
- Investment rules have been eased by removing the maturity restrictions
for first time foreign investors on dated G-Secs. Earlier, first time
foreign investors of G-Secs were mandated to buy securities with at
least 3-year residual maturity. However, such investments will not be
allowed in short-term paper like Treasury Bills
- Qualified Foreign Investors (QFIs) will remain eligible to invest in
corporate debt securities (without any lock-in or residual maturity
clause) and mutual fund debt schemes, subject to a total overall ceiling
of $1 billion.
- Long-term investors include SEBI-registered sovereign wealth funds
(SWFs), multilateral agencies, endowment funds, insurance funds, pension
funds and foreign central banks.
