RBI relaxes FPI short-term debt limits for July-Oct 2022
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2022-23/87 · issued 07 Jul 2022 · ~2 min read
Quick answerRBI temporarily exempts FPI investments in government securities and corporate bonds made between July 8 and October 31, 2022, from the 30% short-term investment cap and one-year minimum residual maturity rule, until maturity or sale.
What changed
FPI investments in government securities and corporate bonds made from July 8 to October 31, 2022, are exempt from the 30% short-term investment limit until maturity or sale. Additionally, FPIs can now invest in commercial papers and non-convertible debentures with original maturity up to one year during this period, also exempt from the short-term limit.
What it means for you
Banks and AD Category-I banks can expect increased FPI inflows into short-term debt instruments, easing liquidity pressures. The relaxation provides temporary flexibility for FPIs to invest without breaching regulatory caps, potentially lowering borrowing costs for corporates and the government.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Inform your AD Category-I bank customers about the temporary exemption from the 30% short-term investment limit for FPIs.
Advise FPIs that investments in government securities and corporate bonds made between July 8 and October 31, 2022, are exempt until maturity or sale.
Facilitate FPI investments in commercial papers and non-convertible debentures with original maturity up to one year during the relaxation period.
Ensure compliance with other applicable laws and permissions beyond this circular.
Who it affects
Authorised Dealer Category-I banks, Foreign Portfolio Investors (FPIs), Corporate bond issuers, Government securities market participants
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-18 05:47 IST
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the 30% short-term investment limit that is being relaxed?
Under existing rules, an FPI's short-term investments in government securities or corporate bonds cannot exceed 30% of its total investment in that category. This circular temporarily exempts investments made between July 8 and October 31, 2022, from that limit.
Does this relaxation apply to all FPI debt investments?
No, it applies only to investments in government securities (including Treasury Bills and State Development Loans) and corporate bonds made during the specified period. It also allows FPIs to invest in commercial papers and non-convertible debentures with original maturity up to one year.
How long does the exemption last?
The exemption applies to investments made between July 8 and October 31, 2022, and remains in effect until the maturity or sale of those investments, whichever is earlier.
📜 Read the original circular — full text as issued by RBI
RBI/2022-23/87
A.P. (DIR Series) Circular No.07
July 07, 2022
To
All Authorised Persons
Madam/Sir,
Investment by Foreign Portfolio Investors (FPI) in Debt - Relaxations
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the paragraph 3 of the press release on “Liberalisation of Forex Flows” dated July 06, 2022 regarding relaxations in the regulatory regime under the Medium-Term Framework. A reference is also invited 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; and
the A.P. (DIR Series) Circular No. 31 dated June 15, 2018 (hereinafter, Directions), as amended from time to time.
2. In terms of paragraphs 4(b)(i) and 4(b)(ii) of the Directions, short-term investments by an FPI in government securities (Central Government securities, including Treasury Bills and State Development Loans) and corporate bonds shall not exceed 30% of the total investment of that FPI in any category. It has been decided that investments by FPIs in government securities and corporate bonds made between July 08, 2022 and October 31, 2022 (both dates included) shall be exempted from the limit on short-term investments till maturity or sale of such investments.
3. In terms of paragraph 4(b)(ii) of the Directions, FPI investments in corporate bonds were subject to a minimum residual maturity requirement of one year. It has been decided to allow FPIs to invest in commercial papers and non-convertible debentures with an original maturity of up to one year, during the period between July 08, 2022 and October 31, 2022 (both dates included). These investments shall be exempted from the limit on short-term investments till maturity or sale of such investments.
4. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
5. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any, required under any other law.
6. These Directions shall be applicable with immediate effect.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2022-23/87 · issued 07 Jul 2022. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=12355&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.