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Informist, Monday, Apr. 6, 2026

 

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--RBI: FY27 FPI invest limits in gilts, state bonds, corporate bonds unch
--RBI: FY27 FPI invest limit in gilts unchanged at 6% for general route 
--RBI:FY27 FPI invest limit in state bonds unchanged at 2% for general route 
--RBI:FY27 FPI invest limit in corp bonds unchanged at 15% for general route 
--RBI:Voluntary Retention Route invest to follow general route cap from Apr 1 
--RBI: FPIs can sell CDS up to 5% of outstanding stock of corp bonds in FY27 

 

NEW DELHI – The Reserve Bank of India Monday kept the limit on foreign portfolio investment in government bonds unchanged at 6% of outstanding stock under the general route for the financial year 2026-27 (Apr-Mar). This was after subsuming the voluntary retention route category into the general route starting Apr. 1.

 

"With effect from April 01, 2026, all existing and future investments under the Voluntary Retention Route shall be subject to the investment limits stipulated for FPI investments under the General Route," the RBI said in a release Monday. It had earlier notified the change in February. The RBI introduced the voluntary retention route in March 2019 to provide an additional channel for FPIs with long-term investment interests in Indian debt markets.

 

Clearing Corp. of India data for Apr. 2 showed an allotment of INR 1.88 trillion under the voluntary retention route, against the total limit of INR 2.50 trillion until Mar. 30. However, the data showed utilisation of the voluntary retention route at only INR 5.86 billion under the general route.

 

The FPI limits for state and corporate bonds were also unchanged, at 2% and 15% of outstanding stock, respectively.  The increase in limits in absolute terms will be split equally between the 'general' and 'long-term' categories for gilts, while the entire increase in limits for state bonds will be added to the 'general' category, the RBI said.

 

The unchanged share of the investment cap will set the FPI limit for gilt investments under the general limit at INR 2.97 trillion in Apr-Sept and INR 3.04 trillion in Oct-Mar. As of Mar. 30, only INR 17.8% of the INR 2.88 trillion investment cap was in use under the general route, CCIL data showed.

 

In absolute terms, the limit for long-term gilt investment under the general route will also rise by around INR 73 billion each half-year, reaching INR 1.73 trillion in Oct-Mar. Only 1.5% of the INR 1.58-trillion limit as of Mar. 30 was in use. Specified securities under the fully accessible route will have all investments by eligible investors valid, with no limit, the RBI said.

 

The investment limit in state bonds in the general category will increase by around INR 112 billion each in Apr-Sept and Oct-Mar to hit INR 1.57 trillion, the RBI said. Less than 1% of this limit was in use on Mar. 30.  The investment limit for long-term state bonds will remain unchanged at INR 71 billion, though there has been no investment under this route at all, CCIL data showed. 

 

Investment limits in corporate bonds will rise by INR 553 billion each in Apr-Sept and Oct-Mar to reach INR 9.91 trillion from the current limit of INR 8.81 trillion. "... the aggregate limit of the notional amount of Credit Default Swaps sold by FPIs shall be 5 per cent of the outstanding stock of corporate bonds," the regulator said. An additional limit of INR 3.30 trillion has been set out by the RBI for this in FY27.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aaryan Khanna

Edited by Saji George Titus

 

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