SEBI on 29th March 2016 has notified, its decision to enhance the limit for investment by FPIs in Government Securities, for the next half year, RBI had previously announced a Medium Term Framework (MTF) for FPI limits in Government securities in consultation with the Government of India.
Key Highlights of the Circular is as follows:
- Limit for FPIs in Central Government securities shall be enhanced to INR 140,000 cr on April 04, 2016 and INR 144,000 cr on July 05, 2016 respectively from the existing limit of INR 135,400 cr.
- Limit for Long Term FPIs (Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks) in Central Government securities shall be enhanced to INR 50,000 cr and INR 56,000 cr on April 04, 2016 and July 05, 2016 respectively from the existing limit of INR 44,100 cr.
- The limit for investment by all FPIs in State Development Loans (SDL) shall be enhanced to INR 10,500 cr on April 04, 2016 and INR 14,000 cr on July 05, 2016 respectively from the existing limit of INR 7,000 cr.
Accordingly, the revised FPI debt limits would be as follows:
| Type of Instrument | Present Upper Cap (INR cr) | Revised Upper
Cap w.e.f April 04, 2016 (INR cr) |
Revised Upper
Cap w.e.f July 05, 2016 (INR cr) |
| Government Debt | 135,400 | 140,000 | 144,000 |
| Government Debt – Long Term | 44,100 | 50,000 | 56,000 |
| State Development Loans | 7,000 | 10,500 | 14,000 |
| Total | 186,500 | 200,500 | 214,000 |
Keeping in view the extent of utilization of the limits for Central Government securities by long term and other investors, it has also been decided that from the next half-year onwards i.e. from October 01, 2016, any unutilized limit within the Government debt limit for Long Term FPIs, at the end of the half-year, shall be made available for investment as additional limit to all categories of FPIs for the subsequent half-year.
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