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RBI Eases Norms For FPI Investment In Corporate Bonds

Capital Market 

The (RBI) relaxed its rules on foreign portfolio investors (FPI) holding of corporate bonds, stating that it has withdrawn its whereby an FPI could not have an exposure of more than 20% of its corporate portfolio to a single corporate, including exposure to entities related to the corporate. As a part of the review of the FPI in Corporate Debt undertaken in April 2018, it was stipulated that no FPI shall have an exposure of more than 20% of its corporate portfolio to a single corporate (including exposure to entities related to the corporate).

FPIs were given exemption from this requirement on their new investments till end-March 2019 to adjust their portfolios. While the provision was aimed at incentivizing FPIs to maintain a portfolio of assets, further market feedback indicates that FPIs have been constrained by this stipulation. In order to encourage a wider spectrum of investors to access the Indian corporate debt market, it is now proposed to withdraw this provision.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 08 2019. 18:36 IST
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