The Reserve Bank of India has issued a circular dated 31.05.2021 notifying the Investment Limits by Foreign Portfolio Investors (FPI) for FY 2021-22. Following directions have been provided as under:
- The limits for FPI investment in Government securities (G-secs) and State Development Loans (SDLs) shall remain unchanged at 6% and 2% respectively, of outstanding stocks of securities for FY 2021-22.
- All investments by eligible investors in the ‘specified securities’ shall be reckoned under the Fully Accessible Route (FAR) in terms of P. (DIR Series) Circular No. 25 dated March 30, 2020.
- The allocation of incremental changes in the G-sec limit (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ – shall be retained at 50:50 for FY 2021-22.
- The entire increase in limits for SDLs (in absolute terms) has been added to the ‘General’ sub-category of SDLs.
- Accordingly, the revised limits (in absolute terms) for the different categories, including the limits for corporate bonds announced, vide P. (DIR Series) Circular No. 14 dated March 31, 2021, shall be as under (Table 1):
| Table – 1: Investment limits for FY 2021-22 | ||||||
| all figures in ₹ Crore | ||||||
| G-Sec General | G-Sec Long Term | SDL General | SDL Long Term | Corporate Bonds | Total Debt | |
| Current FPI limits ^ | 2,34,531 | 1,03,531 | 67,630 | 7,100 | 5,41,488 | 9,54,280 |
| Revised limit for the HY Apr 2021-Sept 2021 | 2,43,914 | 1,12,914 | 76,766 | 7,100 | 5,74,263 | 10,14,957 |
| Revised limit for the HY Oct 2021-Mar 2022 | 2,53,298 | 1,22,298 | 85,902 | 7,100 | 6,07,039 | 10,75,637 |
| ^ as on March 31, 2021 | ||||||
*Tanvi Singh, Editorial Assistant has put this story together.