Investment Limits for Foreign Portfolio Investors (FPI) for the Next
6 Months in Two Tranches Specified
·
Rs. 105bn from 4
April 2016
·
Rs. 100bn from 5 July
2016
·
Limits for State
Development Loans (SDL) also Increased to Rs. 35bn
[RBI
Circular No. 55 dated 29th March 2016]
Sub:
Investment by Foreign Portfolio Investors (FPI) in Government Securities.
Attention
of Authorized Dealer Category-I (AD Category-I) banks is invited to Schedule 5
to the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) Regulations, 2000 notified vide Notification No.
FEMA.20/2000- RB dated May 3, 2000, as amended from time to time. The limits
for investment by foreign portfolio investors (FPI) in Government securities were
last increased in terms of the Medium Term Framework (MTF) announced vide A.P.
(DIR Series) Circular No 19 dated October 6, 2015.
2. As announced
in the MTF, the limits for investment by FPIs in Central Government Securities
for the next half year are proposed to be increased in two tranches, i.e., by
Rs. 105 billion from April 4, 2016 and by Rs.100 billion from July 5, 2016
respectively.
3. As in the
previous half-year, the limits for State Development Loans (SDL) are proposed
to be increased in two tranches, each of Rs.35 billion, from April 4, 2016 and
July 5, 2016 respectively.
4. The total
increase in limits over the next two quarters would, accordingly, be as under:
|
(Rs. in billion) |
|||||
|
|
Central
Government securities |
State
Development Loans |
Aggregate
|
||
|
|
For
all FPIs |
Additional
for Long Term FPIs |
Total
|
For
all FPIs (including Long Term FPIs) |
|
|
Existing
Limits |
1354
|
441
|
1795
|
70
|
1865
|
|
Revised
limits with effect from April 4, 2016 |
1400
|
500
|
1900
|
105
|
2005
|
|
Revised
limits with effect from July 5, 2016 |
1440
|
560
|
2000
|
140
|
2140
|
5. Further,
keeping in view the extent of utilization of the limits for Central Government
securities by long term and other investors, it has been decided that any limit
remaining un-utilised by the long term investors at the end of a half-year
would be made available as additional limit to the investors in the open
category for the following half-year. Accordingly, the limits for the long term
investors remaining unutilized at the end of half year ending Sept 30, 2016
will be released for investment under the open category in October, 2016.
6. All other
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.
7. Further
operational guidelines relating to allocation and monitoring of limits will be
issued by the Securities and Exchange Board of India (SEBI)
8. AD Category –
I banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
9. 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 / approvals, if any, required under any other law.