Registered foreign portfolio investors can open rupee accounts

The Reserve Bank of India (RBI) has said registered foreign portfolio investors (RFPI) will be eligible to open special non-resident rupee (SNRR) accounts and foreign currency accounts with banks. For genuine investments in securities, they can also transfer sums from a foreign currency account to an SNRR account at the prevailing market rate.

This comes in the backdrop of the Securities and Exchange Board of India (Sebi) announcing guidelines on the RFPI front.

RBI also said these investors would be allowed to trade in all exchange-traded derivatives contracts on stock exchanges in India, subject to the limits specified by Sebi from time to time. RFPIs will also be eligible to invest in government securities and corporate debt, subject to limits specified by the central bank and Sebi.

For transactions in the cash and derivatives segment, RFPIs might offer cash or foreign sovereign securities with AAA rating, corporate bonds or domestic government securities as collateral to recognised stock exchanges.

For RFPIs, the investment limits will be 10 per cent (individual) or 24 per cent (aggregate) of the total paid-up equity capital, or 10 per cent (individual) or 24 per cent (aggregate) of the paid-up value of each series of convertible debentures issued by an Indian company. In case there is a composite sectoral cap under the foreign direct investment (FDI) policy, the limits for the RFPI investment will be within the overall sectoral FDI cap, RBI said.