Investment by Foreign Portfolio Investors (FPI) in Government Securities Medium Term Framework
Revision of investment Limits for 2019-20
The limit for FPI investment in Central Government securities (G-secs), State Development Loans (SDLs) and corporate bonds shall be 6%, 2%, and 9% of outstanding stocks of securities, respectively, in FY 2019-20.
The allocation of increase in G-sec limit over the two sub-categories – ‘General’ and ‘Long-term’ – has been set at 50:50 for the year 2019-20. The entire increase in limits for SDLs has been added to the ‘General’ sub-category of SDLs.
In terms of para 3 (g) of the circular dated April 06, 2018, the coupon reinvestment arrangement for G-secs shall be extended to SDLs.
Accordingly, the revised limits for the various categories, after rounding off, would be as under
| Revised Limits for FPI Investment in Debt – 2019-20 (Rupees billion) | ||||||
| G-Sec -General | G-Sec -Long Term | SDL -General | SDL -Long Term | Corporate Bonds | Total Debt | |
| Current Limit | 2,233 | 923 | 381 | 71 | 2,891 | 6,499 |
| Revised Limit for the HY Apr-Sep, 2019 | 2,347 | 1,037 | 497 | 71 | 3,031 | 6,983 |
| Revised Limit for the HY Oct 2019-March, 2020 | 2,461 | 1,151 | 612 | 71 | 3,170 | 7,465 |
The directions 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.
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