RBI/2016-17/72
A.P. (DIR Series) Circular No. 4
September
30, 2016
To,
All Authorised Persons
Madam/Sir
Investment
by Foreign Portfolio Investors (FPI) in Government Securities
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. The limits for investment by foreign portfolio
investors (FPI) in Government securities were last increased in terms of
the Medium Term Framework (MTF) announced videA.P.
(DIR Series) Circular No. 55 dated March 29, 2016.
2. As announced in the MTF, the
limits for investment by FPIs in Central Government Securities for the next
half year are proposed to be increased in two tranches, each of Rs. 100
billion from October 3, 2016 and January 2, 2017 respectively.
3. As in the previous half-year,
the limits for State Development Loans (SDLs) are proposed to be increased
in two tranches, each of Rs.35 billion, from October 3, 2016 and January 2,
2017 respectively.
4. The total increase in limits
over the next two quarters would, accordingly, be as under:
|
Central
Government securities
|
State
Development Loans
|
Aggregate
|
For
All FPIs
|
Additional
for Long Term FPIs
|
Total
|
For
all FPIs
(including Long Term FPIs)
|
Existing Limits
|
1440
|
560
|
2000
|
140
|
2140
|
Revised limits with effect
from October 3, 2016
|
1480
|
620
|
2100
|
175
|
2275
|
Revised limits with effect
from January 2, 2017
|
1520
|
680
|
2200
|
210
|
2410
|
5. As regards the transfer of
unutilized portion of “Long Term FPI” category to “All FPIs” category, a
separate communication will follow.
6. All other existing
conditions, including the security-wise limits, investment of coupons being
permitted outside the limits and investments being restricted to securities
with a minimum residual maturity of three years, will continue apply.
7. The operational guidelines
relating to allocation and monitoring of limits will be issued by the
Securities and Exchange Board of India (SEBI).
8. AD Category – I banks may
bring the contents of this circular to the notice of their constituents and
customers concerned.
9. 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.
Yours
faithfully
(T.
Rabi Sankar)
Chief General Manager
|