Friday, September 24, 2021
HomeRBINo change in FPI investment Limit for G-secs & SDLs for FY...

No change in FPI investment Limit for G-secs & SDLs for FY 2020-21


A.P. (DIR Series) Circular No. 30

April 15, 2020

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. 26 dated March 27, 2019;
b) A.P. (DIR Series) Circular No. 24 dated March 30, 2020;
c) A.P. (DIR Series) Circular No. 25 dated March 30, 2020; and
d) Circular No. FMRD. FMSD.No. 25/14.01.006/2019-20 dated March 30, 2020.

3. Revision of investment Limits for FY 2020-21
a. 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 2020-21.
b. In terms of A.P. (DIR Series) Circular No. 25 dated March 30, 2020, all investments by eligible investors in the specified securities will be under the Fully Accessible Route (FAR) from the date on which the FAR comes into effect. Also, all existing FPI investments in the specified securities shall be reckoned under the FAR. The calculation of outstanding stock of G-secs and utilization levels of limits under the MTF has accordingly been adjusted.
c. 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 2020-21.
d. 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. 24 dated March 30, 2020, shall be as under (Table 1):

Table – 1: Investment limits for FY 2020-21
₹ Crore
G-Sec – General G-Sec – Long Term SDL – General SDL – Long Term Corporate Bonds Total Debt
Current FPI limits 2,46,100 1,15,100 61,200 7,100 3,17,000 7,46,500
Revised limit for the HY Apr -Sept 2020 2,34,531 1,03,531 64,415 7,100 4,29,244 8,38,821
Revised limit for the HY Oct 2020-Mar 2021 2,34,531 1,03,531 67,630 7,100 5,41,488 9,54,280

5. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
6. The directions contained in this circular have been issued under sections 10(4) and 1(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.

T logo 01 TaxClue
TaxClue Team
Taxclue is an online news portal for reporting all news, articles, judgments, Circulars, orders, and notifications relating to various corporate and tax laws in India. We use the tagline ‘Simplifying Laws’. Our mission is to Simplify the Laws and make people aware of their rights and duties in relation to tax matters in order to equip them to participate in nation-building.

Leave a Reply

Follow Us


Recent Posts

eway bill

Consolidated E-way Bill Under GST | Essential Conditions & Benefit

E-way Bill is an essential document required to be generated whenever some movement of goods is involved from one place to another. Whether the movement...

Digital Signing PDF Documents To Close Important Business Deals Easily

A remote working environment has created challenges in signing the documents physically. Digital Signatures turns your remote work easier and helps you sign documents...

12 Things You Must Know About Public Provident Fund (PPF)

Public Provident Fund or PPF has been one of the most popular investment options in India. There are many reasons for the popularity of PPF including...

Decisions at 45th GST Council  Meeting – Key Highlights

The 45th GST Council meeting was held today i.e. on September 17, 2021, under the Chairmanship of Union Finance & Corporate Affairs Minister Smt....

Income tax return filing: Useful tips for first-time return filers

An income tax return is a yearly statement that declares your income and taxes paid during the year to the income tax department. It...

Most Popular