On April 19, 2022, the Reserve Bank of India (RBI) has issued a notification on Limits for investment in debt and sale of Credit Default Swaps by Foreign Portfolio Investors (FPIs).
Key points:
- Limits for FPI investment in Government securities (G-secs), State Development Loans (SDLs) and corporate bonds shall remain unchanged at 6%, 2% and 15% respectively, of outstanding stocks of securities for FY 2022-23.
- All investments by eligible investors in the ‘specified securities’ shall be reckoned under the Fully Accessible Route (FAR) in terms of A.P.
- 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 2022-23.
- The entire increase in limits for SDLs (in absolute terms) has been added to the ‘General’ sub-category of SDL.
- Revised limits (in absolute terms) for the different categories are mentioned below:
| Table – 1: Investment limits for FY 2022-23 | ||||||
| all figures in ₹ Crore | ||||||
| G-Sec General | G-Sec Long Term | SDL General | SDL Long Term | Corporate Bonds | Total Debt | |
| Current FPI limits | 2,53,298 | 1,22,298 | 85,902 | 7,100 | 6,07,039 | 10,75,637 |
| Revised limit for the HY Apr 2022-Sept 2022 | 2,60,594 | 1,29,594 | 89,365 | 7,100 | 6,37,455 | 11,24,107 |
| Revised limit for the HY Oct 2022-Mar 2023 | 2,67,890 | 1,36,890 | 92,828 | 7,100 | 6,67,871 | 11,72,578 |
- Aggregate limit of the notional amount of CDS sold by FPIs shall be 5% of the outstanding stock of corporate bonds. Accordingly, an additional limit of ₹2,22,623 crore is set out for FY 2022-23.