RBI increases FPI limits in govt bonds by Rs 170 billion

Mumbai: The Reserve Bank today increased foreign portfolio investors' (FPI) limits on investment in government bonds by an aggregate Rs 170 billion for the April-June period.

The limits for investment by FPIs in central government securities have been increased by Rs 110 billion, while the same for SDLs are up by Rs 60 billion, the apex bank said in a notification.

On the central government securities, the cap on general category has been increased to Rs 1,565 billion from the Rs 1,520 billion, while for long term investors, the limit has been upped to Rs 745 billion from Rs 680 billion earlier.

This takes the total increase in the investment caps for FPIs in g-secs up to Rs 2,310 billion from Rs 2,200 billion. On the SDLs, the cap on investments by FPIs, including the long term ones, has been moved up to Rs 270 billion from
the earlier Rs 210 billion earlier.

The limits for the long term investors remaining unutilised at the end of March 2017 will be released for investment under the general category in April 2017, it said.

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, it added.

The operational guidelines relating to allocation and monitoring of limits will be issued by capital markets regulator SEBI, the RBI said.