Reserve Bank of India (‘RBI’) has by its Circular dated April 15, 2020, revised the investment limits for foreign portfolio investors (‘FPIs’) in Government Securities (‘G-secs’) for the financial year (‘FY’) 2020-2021 as follows:

i.     The limits for FPI investment in G-secs and State Development Loans (‘SDLs’) remains unchanged at 6% and 2%, respectively, of outstanding stocks of securities for 2020-21;

ii.   All investments by eligible investors in the specified securities will be under the Fully Accessible Route (‘FAR’) from the effective date. Further, all existing FPI investments in specified securities will be under the FAR and the calculation of outstanding stock of G-secs and utilization levels of limits under the Medium Term Framework has accordingly been adjusted;

iii.  The allocation of incremental changes in the G-Sec limit (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ – will be retained at 50:50 for the FY 2020-21; and

iv.   The entire increase in limits for State Development Loans (in absolute terms) has been added to the ‘General’ sub-category of SDLs.

The revised limits (in absolute terms) for corporate bonds for the FY 2020-21 are:

i.     Current FPI limits: INR 3,17,000 crore;
ii.   Revised limit for the half year April-September 2020: INR 4,29,244 crore; and
iii.  Revised limit for the half year October 2020-March 2021: INR 5,41,488 crore.