RBI removes minimum maturity cap for FPI investment in bond market

In case of corporate bonds, the minimum residual maturity will be one year now, relaxed from three years earlier

The Reserve Bank of India (RBI), in an attempt to keep foreign investors invested in the local bond market, late on Friday said they could invest in any maturity they wished for instead of the restrictive clause earlier that the investment must be in paper that had at least three years left to mature.
 

“The minimum residual maturity requirement for central government securities and state development loan categories stands withdrawn, subject to the condition that investment in securities with residual maturity below one year by an FPI under either category shall not exceed, at any point of time, 20 per