The Reserve Bank of India (RBI) has made changes in directions issued on investment by Foreign Portfolio Investors in Debt vide notification no. RBI/2019-20/150 dated January 23, 2020. On a review, the following changes are made to the Directions:

  • The Short-term investment limit by an FPI in Govt. securities/ State development loans and corporate bonds increased from 20% to 30%.
  • FPI investments in Security Receipts are currently exempted from the short-term investment limit. These exemptions shall also extend to FPI investments in the following securities:
    1. Debt instruments issued by Asset Reconstruction Companies; and
    2. Debt instruments issued by an entity under the Corporate Insolvency Resolution Process as per the resolution plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016

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