The Reserve Bank of India (RBI) on April 26, 2024, issued revised limits for investment by foreign portfolio investors (FPIs) in debt instruments such as government securities and corporate bonds along with limits for sale of credit default swaps by FPIs for the financial year (FY) 2024-2025.

 

Key highlights:

 

  • The investment limits for FPIs in government securities (g-secs), state government securities (SGSs) and corporate bonds remain unchanged at 6% (six percent), 2% (two percent) and 15% (fifteen percent), respectively, of the outstanding stocks of securities for the FY 2024-2025.

 

  • The ratio of allocation of incremental changes in the investment limits for g-secs (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ retained at 50:50 for the FY 2024-25.

 

  • The circular provides a table with details of revised FPI investment limits in respect of different categories of the aforesaid debt instruments for two parts of FY 2024-2025.

 

  • The aggregate limit of the notional amount of credit default swaps sold by FPIs is pegged at 5% (five percent) of the outstanding stock of corporate bonds along with an additional limit of INR 2,54,500 crore set for FY 2024-2025.

 

Authors & Contributors

Partner:

Dhruv Chatterjee

 

Associate(s):

Prachi Yadav

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Author: sarafandpartners