RBI Maintains FPI Investment Cap in G-Sec at 6% of Outstanding Stock for FY25

RBI maintains FPI investment limits in government securities (6%), state development loans (2%), and corporate bonds (15%) for fiscal 2024-25.

The Reserve Bank on Friday said the limits for FPI investment in government securities, state development loans and corporate bonds will remain unchanged at 6 per cent, 2 per cent and 15 per cent, respectively, of outstanding stocks of securities for the current fiscal.

As of now, all investments by eligible investors in the 'specified securities' will be reckoned under the fully accessible route (FAR), the RBI said in a notification.

''The limits for FPI investment in government securities (g-secs), state government securities (SGSs) and corporate bonds shall remain unchanged at 6 per cent, 2 per cent and 15 per cent, respectively, of the outstanding stocks of securities for 2024-25,'' it said.

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 2024-25, it added.

The entire increase in limits for SDLs (in absolute terms) has been added to the general sub-category of state development loans, it noted.

The notification further said the aggregate limit of the notional amount of Credit Default Swaps (CDS) sold by foreign portfolio investors (FPIs) will be 5 per cent of the outstanding stock of corporate bonds. Accordingly, an additional limit of Rs 2,54,500 crore is set out for 2024-25.

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