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Informist, Friday, Jun. 5, 2026

 

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--RBI issues amended norms for FPIs' investments in government securities 
--RBI: FPI invest limit for central govt securities at INR 4.62 tln for H1 
--RBI: FPI invest limit for central govt securities at INR 4.77 tln for H2 
--RBI: FPI invest limit for state govt securities at INR 1.53 tln for H1 
--RBI: FPI invest limit for state govt securities at INR 1.64 tln for H2 
--RBI: To add all new 5-, 7-, 10-, 15-, 30-, 40-year green bonds under FAR 
--RBI: To add 6.68%, 2040; 7.24%, 2055; 7.71%, 2066 bonds in FAR immediately 
--RBI: Amended norms for FPI g-sec investments effective immediately

 

MUMBAI – In an amended direction Friday, the Reserve Bank of India removed limits on investments by foreign portfolio investors in Indian government bonds through the General Route, shortly after RBI Governor Sanjay Malhotra announced relaxations on these investors' purchases in his monetary policy statement. The amendment includes the addition of three existing gilts to the list of bonds eligible under the Fully Accessible Route, including the current 15-year benchmark 6.68%, 2040 gilt. The amendment is effective immediately, the central bank said. 

 

"On a review, and with a view to providing greater ease of investment to FPIs, it has been decided to withdraw the requirement for FPIs to comply with the above three limits, for their investments in Government securities under the General Route," the RBI said in the release.

 

Before the amendment, FPIs investing in gilts through the General Route were subject to a short-term investment limit, a security-wise limit, and a concentration limit. FPIs investing in Indian gilts through the General Route are subject to their total holdings being under 6% of the outstanding stocks of securities under the General Route for a given financial year.

 

The concentration limit referred to a 15?p of the overall investment limit for each category for long-term FPIs and 10% for other FPIs buying gilts or state bonds. The security-wise limit referred to a cap of 30% on the outstanding of a gilt applicable to investments by FPIs and investments made through the Special Rupee Vostro Account Route. The short-term investment limit was applicable to FPIs' investments in Treasury bills, gilts, or state bonds having a residual maturity of up to one year, which was not to exceed 30% of the total investment of the FPI in each category, with caveats for date of purchase.

 

The amendment has also merged the "general" and "long-term" sub-categories of investment limits into a single threshold for FPIs' purchase of central and state government bonds, respectively. The RBI has set the limit at INR 4.62 trillion for Apr-Sept and INR 4.77 trillion for Oct-Mar of the financial year started Apr. 1 for central government bonds. The limit for investment in state government securities through this route has been set at INR 1.53 trillion for Apr-Sept and INR 1.64 trillion for Oct-Mar.

 

In the amendment, the RBI added the 6.68%, 2040; the 7.24%, 2055; and the 7.71%, 2066 bonds to the list of Fully Accessible Route bonds. It will also add all new issuances of five-, seven-, 10-, 15-, 30-, and 40-year green bonds to the Fully Accessible Route list, it said. As Malhotra stated earlier in the day, all new issuances of 15-year, 30-year, and 40-year gilts will also be eligible for investment by FPIs under this route.

 

"These measures, along with the tax benefits provided by the government this morning, should help attract foreign capital for government borrowing," Malhotra said in his monetary policy statement.  End

 

Reported by Cassandra Carvalho

Edited by Rajeev Pai

 

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