RBI relaxes norms on foreign sovereign bond investment

The RBI has allowed the banks to keep sovereign bonds away from the 10 per cent limit

The Reserve Bank of India (RBI) has relaxed its norms on what banks can do with their excess dollars in the currency market, according to sources.

The RBI had already allowed banks to invest their excess dollars in foreign currency bonds, but a rule in July 2016 had stated that a bank’s investment in unlisted securities should not be over 10 per cent of their investment in non-statutory liquidity ratio (SLR) bonds, or corporate bonds.

Now, the foreign currency bonds, even if issued by sovereigns, are unlisted for this purpose in India, and banks’ investment in them was to remain