India to review foreign investments in corp bonds once limits met - RBI deputy Gandhi

MUMBAI (Reuters) - India has been monitoring foreign inflows into corporate bonds and will review investment limits for overseas institutional funds once their investment quota is exhausted, Reserve Bank of India Deputy Governor R. Gandhi said on Monday.

Overseas demand for corporate bonds has surged since the quota for government bonds was exhausted last year, with three-fourths of the $51 billion foreign investment limit on corporate bonds already utilised.

Gandhi added the central bank has to tread a fine balance in terms of the foreign holdings of Indian bonds given the need to be mindful about the country's external debt.

"We are very cautious of the trade-off that we need to keep in mind while permitting foreign flows into the debt segment," Gandhi said at an event in Mumbai.

"Therefore, consistently we have been monitoring the level of flows coming into this (corporate bond) segment."

(Reporting by Swati Bhat, Dipika Lalwani, and Suvashree Dey Choudhury; Writing by Himank Sharma; Editing by Rafael Nam)