Reserve Bank of India has relaxed norms for foreign portfolio investors, FPIs investing in corporate debt securities through the general route. In a notification, RBI announced that FPIs will no longer be required to adhere to the short-term investment and concentration limits.
At present, investments by Foreign Portfolio Investors (FPIs) in corporate debt securities through the General Route are subject to the short-term investment limit and the concentration limit as prescribed in the Master Direction, respectively. On a review, and with a view to providing greater ease of investment to FPIs, it has been decided to withdraw the requirement for investments by FPIs in corporate debt securities to comply with the short-term investment limit and the concentration limit.
“On a review, and with a view to providing greater ease of investment to FPIs, it has been decided to withdraw the requirement for investments by FPIs in corporate debt securities to comply with the short-term investment limit and the concentration limit,” the RBI said in a circular.
Foreign Portfolio Investment (FPI) is an investment by foreign entities and non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, infrastructure securities, etc. Unlike FDI investments, FPI does not provide the investor with direct ownership of a company’s assets and is relatively liquid depending on the volatility of the market.
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