Investment sub-limit for foreign fund in govt papers hiked

Mumbai: The Reserve Bank today doubled the sub-limit for investment in government securities to $10 billion by long-term investors like sovereign wealth funds and foreign central banks, with a view to attract more funds.

“It has now been decided, in consultation with government to enhance, with immediate effect, the existing sub-limit of $5 billion available to long-term investors registered with Sebi – SWFs, multilateral agencies, pension and foreign central banks for investment in government securities to $10 billion…,” RBI said in a notification.[caption id=“attachment_1365467” align=“alignleft” width=“380”] The RBI logo. Reuters[/caption]

However, the total limit of $30 billion available for foreign investments in government securities has not been tinkered with.

Foreign institutional investors-qualified foreign investors (QFIs) and long-term investors-registered with Sebi are allowed to purchase government securities and non-convertible debentures (NCDs) or bonds issued by an Indian company within the limit of $30 billion.

The operational guidelines in this regard will be issued by Sebi, it said.

PTI