RBI increases FPI limits in govt bonds by Rs170 billion

The limits for investment by FPIs in central govt securities have been increased by Rs110 billion, while the same for SDLs are up by Rs60 billion, says RBI


The limits for the long term investors remaining unutilised at the end of March 2017 will be released for investment under the general category in April 2017, RBI said. Photo: Mint
The limits for the long term investors remaining unutilised at the end of March 2017 will be released for investment under the general category in April 2017, RBI said. Photo: Mint

Mumbai: The Reserve Bank of India (RBI) on Friday increased foreign portfolio investors’ (FPI) limits on investment in government bonds by an aggregate Rs170 billion for the April- June period.

The limits for investment by FPIs in central government securities have been increased by Rs110 billion, while the same for State development loans (SDLs) are up by Rs60 billion, the RBI said in a notification.

On the central government securities, the cap on general category has been increased to Rs1,565 billion from the Rs1,520 billion, while for long term investors, the limit has been upped to Rs745 billion from Rs680 billion earlier.

This takes the total increase in the investment caps for FPIs in g-secs up to Rs2,310 billion from Rs2,200 billion. On the SDLs, the cap on investments by FPIs, including the long term ones, has been moved up to Rs270 billion from the earlier Rs210 billion earlier.

The limits for the long term investors remaining unutilised at the end of March 2017 will be released for investment under the general category in April 2017, it said.

Existing conditions, including the security-wise limits, investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, will continue to apply, it added. The operational guidelines relating to allocation and monitoring of limits will be issued by capital markets regulator SEBI, the RBI said.

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