RBI Ups FPI Investment Limits by 1,20,000 crs for FY 2021-22
[A.P. (DIR Series) Circular No. 05 dated May 31,
2021]
Investment by Foreign
Portfolio Investors (FPI) in Government Securities: Medium Term Framework (MTF)
Attention of Authorised Dealer Category-I (AD Category-I) banks is
invited to Schedule 1 to the Foreign Exchange Management (Debt Instruments)
Regulations, 2019 notified, vide Notification No. FEMA. 396/2019-RB dated October 17, 2019, as amended from
time to time and the relevant directions issued thereunder.
2. A reference is
also invited to the following directions issued by the Reserve Bank:
a)
A.P. (DIR Series) Circular No. 25 dated March 30, 2020;
b)
Circular No. FMRD.FMSD.No.25/14.01.006/2019-20 dated March 30, 2020;
c)
A.P. (DIR Series) Circular No. 30 dated April 15, 2020; and
d)
A.P. (DIR Series) Circular No. 14 dated March 31, 2021.
3. Investment Limits
for FY 2021-22
a.
The limits for FPI investment in
Government securities (G-secs) and State Development Loans (SDLs) shall remain
unchanged at 6% and 2% respectively, of outstanding stocks of securities for FY
2021-22.
b.
As hitherto, all investments by eligible
investors in the ‘specified securities’ shall be reckoned under the Fully
Accessible Route (FAR) in terms of A.P. (DIR Series) Circular No. 25 dated March 30, 2020.
c.
The allocation of incremental changes in
the G-sec limit (in absolute terms) over the two sub-categories – ‘General’ and
‘Long-term’ – shall be retained at 50:50 for FY 2021-22.
d.
The entire increase in limits for SDLs
(in absolute terms) has been added to the ‘General’ sub-category of SDLs.
4. Accordingly, the
revised limits (in absolute terms) for the different categories, including the
limits for corporate bonds announced, vide
A.P. (DIR Series) Circular No. 14 dated March 31, 2021, shall be as under (Table 1):
|
Table
- 1: Investment limits for FY 2021-22 |
||||||
|
All figures in ₹ Crore |
||||||
|
|
G-Sec
General |
G-Sec
Long Term |
SDL General |
SDL Long
Term |
Corporate
Bonds |
Total Debt |
|
Current FPI limits
^ |
2,34,531 |
1,03,531 |
67,630 |
7,100 |
5,41,488 |
9,54,280 |
|
Revised limit for
the HY Apr 2021-Sept 2021 |
2,43,914 |
1,12,914 |
76,766 |
7,100 |
5,74,263 |
10,14,957 |
|
Revised limit for
the HY Oct 2021-Mar 2022 |
2,53,298 |
1,22,298 |
85,902 |
7,100 |
6,07,039 |
10,75,637 |
^ as on March 31,
2021
5. AD Category – I
banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
6. The directions
contained in this circular have been issued under sections 10(4) and 11(1) of
the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions/approval, if any, required under any other law.