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FPI Investment Limits in G-Secs and SDLs for FY 2021-22

Current · Source: Reserve Bank of India · RBI/2021-22/44 · issued 31 May 2021 · ~2 min read
Quick answerRBI has kept FPI investment limits in government securities at 6% and SDLs at 2% of outstanding stocks for FY 2021-22. The 50:50 split between General and Long-term sub-categories for G-secs continues, with absolute limits revised upward for the first and second halves of the year.
The rule, in the simplest words
How it plays out — a real example

As a treasury officer in Indore, I can expect continued FPI inflows into government securities within the same percentage framework, providing stability for debt markets. This means I can plan FPI investments and manage liquidity more effectively, ensuring a predictable environment for foreign investors.

What changed

The circular confirms that FPI investment limits for G-secs (6%) and SDLs (2%) remain unchanged for FY 2021-22. The allocation of incremental G-sec limit changes between General and Long-term sub-categories stays at 50:50. Absolute limits for each half-year (Apr-Sep 2021 and Oct 2021-Mar 2022) have been revised upward, as shown in Table 1.

What it means for you

Banks and authorized dealers can expect continued FPI inflows into government securities within the same percentage framework, providing stability for debt markets. The revised absolute limits offer clarity for planning FPI investments and managing liquidity. The unchanged structure signals RBI's intent to maintain a predictable environment for foreign investors.

What you must do

Who it affects

Authorized Dealer Category-I banks, Foreign Portfolio Investors (FPIs), Treasury departments of banks, Custodians of securities

❓ Common questions

What are the FPI investment limits for G-secs and SDLs for FY 2021-22?

The limits remain unchanged at 6% of outstanding G-secs and 2% of outstanding SDLs. Absolute limits are revised for each half-year, as detailed in Table 1 of the circular.

How is the incremental G-sec limit allocated between sub-categories?

The allocation remains at 50:50 between the General and Long-term sub-categories for FY 2021-22.

Are there any changes to the Fully Accessible Route (FAR)?

No, all investments by eligible investors in specified securities continue to be reckoned under FAR, as per earlier circulars.

📜 Read the original circular — full text as issued by RBI
RBI/2021-22/44 A.P. (DIR Series) Circular No. 05 May 31, 2021 To, All Authorized Persons Madam / Sir Investment by Foreign Portfolio Investors (FPI) in Government Securities: Medium Term Framework (MTF) Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 1 to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified, vide Notification No. FEMA. 396/2019-RB dated October 17, 2019 , as amended from time to time and the relevant directions issued thereunder. 2. A reference is also invited to the following directions issued by the Reserve Bank: a) A.P. (DIR Series) Circular No. 25 dated March 30, 2020 ; b) Circular No. FMRD.FMSD.No.25/14.01.006/2019-20 dated March 30, 2020 ; c) A.P. (DIR Series) Circular No. 30 dated April 15, 2020 ; and d) A.P. (DIR Series) Circular No. 14 dated March 31, 2021 . 3. Investment Limits for FY 2021-22 The limits for FPI investment in Government securities (G-secs) and State Development Loans (SDLs) shall remain unchanged at 6% and 2% respectively, of outstanding stocks of securities for FY 2021-22. As hitherto, all investments by eligible investors in the ‘specified securities’ shall be reckoned under the Fully Accessible Route (FAR) in terms of A.P. (DIR Series) Circular No. 25 dated March 30, 2020 . The allocation of incremental changes in the G-sec limit (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ – shall be retained at 50:50 for FY 2021-22. The entire increase in limits for SDLs (in absolute terms) has been added to the ‘General’ sub-category of SDLs. 4. Accordingly, the revised limits (in absolute terms) for the different categories, including the limits for corporate bonds announced, vide A.P. (DIR Series) Circular No. 14 dated March 31, 2021 , shall be as under (Table 1): Table - 1: Investment limits for FY 2021-22
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/44 · issued 31 May 2021. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal systems with the revised FPI investment limits for G-secs and SDLs for both halves of FY 2021-22.
📜 Compliance
  • Inform FPI clients and constituents about the unchanged percentage limits and the revised absolute limits.
  • Ensure compliance with the Fully Accessible Route (FAR) for specified securities as per earlier circulars.
  • Monitor sub-category allocations (General vs Long-term) for G-secs to avoid breaching limits.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (Authorized Dealer Category-I banks, Foreign Portfolio Investors (FPIs), Treasury departments of banks, Custodians of securities), your first concrete step on “FPI Investment Limits in G-Secs and SDLs for FY 2021-22” is: “Update internal systems with the revised FPI investment limits for G-secs and SDLs for both halves of FY 2021-22.” (RBI issued this 31 May 2021).

  1. Circular: RBI/2021-22/44 -- FPI Investment Limits in G-Secs and SDLs for FY 2021-22
  2. Issued: 31 May 2021
  3. Action required: Update internal systems with the revised FPI investment limits for G-secs and SDLs for both halves of FY 2021-22.
  4. Action required: Inform FPI clients and constituents about the unchanged percentage limits and the revised absolute limits.
  5. Action required: Ensure compliance with the Fully Accessible Route (FAR) for specified securities as per earlier circulars.
  6. Action required: Monitor sub-category allocations (General vs Long-term) for G-secs to avoid breaching limits.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12102&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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