What changed
The overall cap for foreign investment in government dated securities was raised by USD 5 billion to USD 30 billion. The new USD 5 billion sub-limit is available only to SEBI-registered long-term investors such as Sovereign Wealth Funds, multilateral agencies, pension/insurance/endowment funds, and foreign central banks.
What it means for you
Banks can now facilitate additional foreign inflows into government securities from long-term investors, which may help ease domestic bond yields. The move signals RBI's intent to attract stable, long-term capital while keeping the existing framework for other investors unchanged.
What you must do
- Update internal systems to reflect the new overall limit of USD 30 billion for government securities.
- Inform clients and constituents about the new USD 5 billion sub-limit for long-term investors.
- Monitor SEBI operational guidelines for implementation details.
- Ensure compliance with all other existing conditions for government securities investments.
Who it affects
AD Category-I banks, SEBI-registered long-term investors (SWFs, pension funds, etc.), FIIs and QFIs investing in government securities
What is the new total limit for foreign investment in government dated securities?
The total limit has been increased from USD 25 billion to USD 30 billion, effective immediately.
Who can invest under the additional USD 5 billion limit?
Only SEBI-registered long-term investors, including Sovereign Wealth Funds, multilateral agencies, pension/insurance/endowment funds, and foreign central banks.
Are the existing conditions for other investors changed?
No, all other existing conditions for investment in government securities remain unchanged.