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).
- 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.