Friday, December 15, 2017

Investment by Foreign Portfolio Investors (FPI) in Government Securities

Medium Term Framework – Review
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA.20/2000-RB dated May 3, 2000, as amended from time to time.
Revision of Limits for the next quarter Jan - Mar 2018
2. The limits for investment by FPIs for the quarter January – March 2018 is increased by INR 64 billion in Central Government Securities (Central G-Secs) and INR 58 billion in State Development Loans (SDLs). The revised limits are allocated as per the modified framework prescribed in the RBI/2017-18/12 A.P.(Dir Series) Circular No.1 dated July 3, 2017, and given as under.
Limits for FPI investment in Government Securities
(₹ Billion)
 Central Government SecuritiesState Development LoansAggregate
GeneralLong TermTotalGeneralLong TermTotal
Existing limits1,8976032,500300933932,893
Revised limits1,9136512,5643151364513,015
3. The revised limits will be effective from January 01, 2018.
4. The operational guidelines relating to allocation and monitoring of limits will be issued by the Securities and Exchange Board of India (SEBI).
5. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any, required under any other law.

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