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RBI allows FPIs to buy T-bills; debt limit stays(The Hindu)
What has happened?
The Reserve Bank of India (RBI) has allowed foreign portfolio investors (FPIs) to invest in treasury bills issued by the central government
Earlier
Foreign portfolio investors were permitted to invest in corporate bonds with minimum residual maturity of above one year
Consistency
- The April circular was issued to bring consistency across debt categories and hence it was stipulated that investments by an FPI in corporate bonds with residual maturity below one year should not exceed 20% of the total investment of that FPI in corporate bonds.
- According to the circular, if there are investments in securities with less than one year residual maturity as on May 2, and it constitutes more than 20% of the total investment in any category, the FPI will have to bring such share below 20% within a period of six months from the date of the circular
