Investments by FPIs in G-Sec shall be exempted from limit on short-term investments

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  • Last Updated on 11 July, 2022

Investments by FPIs

Circular no. A.P. (DIR Series) Circular No.07, Dated: 07.07.2022

The RBI has issued clarification w.r.t Investment by FPIs in Govt. Securities. Accordingly, RBI clarified that short-term investments by an FPI in government securities and corporate bonds shall not exceed 30% of the total investment of that FPI in any category. It has been decided that investments by FPIs in government securities and corporate bonds made between July 08, 2022, and October 31, 2022, shall be exempted from the limit on short-term investments till the maturity or sale of such investments.

FPI investments in corporate bonds were subject to a minimum residual maturity requirement of one year. RBI further decided to allow FPIs to invest in commercial papers and non-convertible debentures with an original maturity of up to one year, during the period between July 08, 2022, and October 31, 2022. These investments shall be exempted from the limit on short-term investments till the maturity or sale of such investments. These Directions shall be applicable with immediate effect.

Click Here To Read The Full Circular

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