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RBI/2016-17/265
A.P.(DIR Series) Circular No. 43
March
31, 2017
To,
All Authorised Persons
Madam / Sir,
Investment by Foreign Portfolio
Investors 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 (FPIs) in Government securities were last
increased in terms of Medium Term Framework (MTF) announced vide A.P. (DIR Series) Circular No. 4
dated September 30, 2016.
2. The limits for investment by
FPIs in Central Government Securities and State Development Loans (SDLs)
for the quarter April-June 2017 are proposed to be increased by Rs. 110
billion and Rs. 60 billion respectively.
3. The total increase in limits
over the next quarter would, accordingly, be as under:
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Rs.
Billion
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Central
Government securities
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State
Development Loans
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Aggregate
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For
all FPIs- General Category
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Additional
for Long Term FPIs
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Total
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For
all FPIs (including Long Term FPIs)
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Existing Limits
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1520
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680
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2200
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210
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2410
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Revised limits for quarter
April-June, 2017
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1565
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745
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2310
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270
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2580
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The revised limits will be
effective from April 1, 2017.
5. The limits for the long term
investors remaining unutilized at the end of March 2017 will be released
for investment under the general category in April 2017.
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 to 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
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