Banks surge on report govt may raise bond investment limit for FPIs to 10%

Additionally, sentiment at D-Street was bolstered by the latest amendments approved by the Cabinet Committee of Economic Affairs with respect to the Insolvency and Bankruptcy Code (IBC).

Banking counters such as IDBI Bank, State Bank of India (SBI), YES Bank, and ICICI Bank, were trading higher on Friday after reports suggested that the government is considering increasing the government bond investment limit of foreign portfolio investors (FPIs) to at least 10 per cent of the outstanding, from 6 per cent now, with an aim to incorporate local bonds into global bond indices.

According to a Business Standard report, the central bank, however, wants the government to go slow and first check how the currency risk is covered from the issuer perspective, before increasing the limits further. Hence, any