"It has now been decided in consultation with market participants, to permit settlements on T+2 basis for outright secondary market transactions in government securities undertaken by FPIs," the central bank said in a notification.
It said all sale and purchase transactions in government securities, where at least one of the parties is an FPI, will be settled only on T+2 basis.
All other trades not involving an FPI will continue to settle on T+1 basis, RBI said.
In its 4th Bi-Monthly Monetary Policy Statement, 2014-15 in September last, RBI Governor Raghuram Rajan had said that an extended time period will be provided to settle trades on government securities by FPIs and foreign investors.
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