The RBI has decided to enhance the investment limit in government securities available to FIIs/QFIs/FPIs by USD 5 billion, while simultaneously reducing the amount available to long term investor from USD 10 billion to USD 5 billion within the overall limit of USD 30 billion. The incremental investment limit of USD 5 billion would be required to be invested in government bonds with a minimum residual maturity of three years. Further, all future investment against the limit vacated when the current investment by an FII/QFI/FPI runs off either through sale or redemption would also be required to be made in government bonds with a minimum residual maturity of three years. It was, however, clarified that there would be no lock-in period and FIIs/QFIs/FPIs would be free to sell the securities (including that are presently held with less than three years of residual maturity) to the domestic investors.
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