RBI eases foreign ownership norms for government debt
Q. RBI has announced easing of norms in foreign ownership of government debt by announcing higher investment limit in rupee terms in G-secs. RBI has increased the limit to?- Published on 07 Oct 15a. INR 1.53 lakh crore to 1.7 lakh crore from October 12
b. INR 1.86 lakh crore from January 1st
c. Both of the above
d. Neither of the above
ANSWER: Both of the above
RBI has announced higher investment limits in rupee terms in G-secs by FPIs to bring a total of INR 1.2 lakh crore in March 2018. This is after RBI decided to fix FPI investment limits in rupee terms and raise in phases to attain 5% of the outstanding stock by March in the year 2018. Limits for FPI investment in debt securities will be fixed in rupee terms. This will open up investment of INR 1.2 lakh crore billion in the limit for central G-secs by March 2018 over and above existing limit of INR 1.5 lakh crore for all government securities. RBI has decided to enhance limit for investment by FPIs in G-secs in two tranches and there will be a separate limit for investment by all FPIs in state development loans to be increased in phases to reach 2 of outstanding stock by March 2018. This will equal an additional limit of INR 50,000 crore by March 2018. Changes are in line with Medium term framework/MTF for FPI limits in G-secs to provide a more predictable regime.
