Introduction: On April 26, 2024, the Reserve Bank of India (RBI) announced that the investment limit by Foreign Portfolio Investors (FPI) in Government Securities (G-Sec) will remain unchanged at 6% of outstanding security stocks for the fiscal year 2024-25 (FY25).
Key Points:
- Investment Limits:
- Government Securities (G-Sec): 6% of outstanding security stocks.
- State Government Securities (SGSs): 2% of outstanding security stocks.
- Corporate Bonds: 15% of outstanding security stocks.
- Fully Accessible Route (FAR): All investments by eligible investors in ‘specified securities’ will be considered under FAR.
- Incremental G-Sec Limit Allocation:
- The allocation of incremental changes in the G-Sec limit will be classified into two sub-categories: General and Long Term, retained at a 50:50 ratio for FY25.
- The entire increase in the limit for State Development Loans (SDLs) will be added to the general sub-category of SDLs.
Additional Information:
- Credit Default Swaps (CDS): The aggregate limit for the national amount of CDS sold by foreign portfolio investors will be 5% of the outstanding stock of corporate bonds.
- Additional Limit: An additional limit of Rs 2,54,000 crore is allocated for FY25.
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