RBI announces measures to attract capital inflow

Reserve Bank of India today came out with a slew of measures to boost capital inflow into the country, aimed at support the free fall of the rupee.

FP Staff June 25, 2012 14:57:03 IST
RBI announces measures to attract capital inflow

Reserve Bank of India today came out with a slew of measures to boost capital inflow into the country, aimed at support the free fall of the rupee.

The central bank has raised the external commercial borrowing limit to $10 billion and increased the foreign institutional investors' investment limit in government securities by $5 billion to $20 billion.

RBI announces measures to attract capital inflow

Reuters

Those sovereign wealth funds, multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks registered with SEBI, can also invest in government bonds for the entire limit of $20 billion.

Qualified foreign investors (QFIs) can now invest in those mutual fund (MF) schemes that hold at least 25 percent of their assets (either in debt or in equity or both) in the infrastructure sector under the current $3 billion sub-limit for investment in mutual funds related to infrastructure.

According to a KPMG report, QFIs are persons resident in a country that is compliant with financial action task force (FATF) standards; and signatory to International Organization of Securities Commission's (IOSCO) multilateral memorandum of understanding ('MOU').

The Indian rupee and benchmark stock indexes trimmed gains after the Reserve Bank of India announced it would raise investment limits in government bonds, disappointing investors who had expected bolder measures.

At 2:39 pm Mumbai time, the rupee was at 56.96/97 to the dollar, weakening from 56.55 levels before the announcement. The currency was still up on the day, after closing at 57.12/13 on Friday, and still well above its record low of 57.32 hit in the previous session.

India's benchmark indexes erased earlier mild gains to fall, with the main BSE index down 0.2 percent.

With inputs from Reuters

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Lakshmi Vilas Bank placed under moratorium, withdrawals capped at Rs 25,000; RBI proposes merger with DBS Bank
India

Lakshmi Vilas Bank placed under moratorium, withdrawals capped at Rs 25,000; RBI proposes merger with DBS Bank

TN Manoharan, former non-executive chairman of Canara Bank, has been appointed as the administrator of the bank

Laxmi Vilas Bank, DBIL merger effective from 27 Nov, says RBI after Cabinet nod
Business

Laxmi Vilas Bank, DBIL merger effective from 27 Nov, says RBI after Cabinet nod

The moratorium imposed on the crisis-ridden lender will be removed on Friday and depositors of LVB will be able to operate their accounts as customers of DBS Bank India from that day, said the Central bank

GDP to contract 8.6% in Q2; India has entered recession for first time, says RBI official
Business

GDP to contract 8.6% in Q2; India has entered recession for first time, says RBI official

Researchers have used the 'nowcasting' method to arrive at the estimates ahead of the official release of data and their views in an article in RBI's monthly bulletin released on Wednesday do not constitute the central bank's views