A.P. (DIR Series) Circular No. 33
All Authorised Persons
Madam / Sir
by Foreign Portfolio Investors (FPI) in Debt - 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, 2017 notified vide Notification No. FEMA 20(R)/2017-RB dated November 07, 2017, as
amended from time to time and the relevant directions issued thereunder. A
reference is also invited to AP (DIR Series)
Circular No. 22 dated April 6, 2018, AP
(DIR Series) Circular No.31 dated June 15, 2018, and AP (DIR Series)
Circular No. 26 dated March 27, 2019 on FPI investments in debt
2. As a measure to broaden
access of non–resident investors to debt instruments in India, Foreign
Portfolio Investors (FPI) are now permitted to invest in municipal bonds.
3. FPI investment in municipal
bonds shall be reckoned within the limits set for FPI investment in State
Development Loans (SDLs).
4. All other existing conditions
for investment by FPIs in the debt market remain unchanged.
5. AD Category-I banks may bring
the contents of the circular to the notice of their customers/constituents
6. Necessary amendments to
Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) Regulations, 2017 (Notification
No. FEMA 20(R)/2017-RB dated November 07, 2017) have been notified
by the Government on April 18, 2019 and
are annexed to this circular.
7. 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 / approvals, if any, required under any other law.
Chief General Manager