SEBI hikes FPI investment limit for government securities

DSIJ Intelligence / 04 Apr 2017

SEBI hikes FPI investment limit for government securities

Securities Exchange Board of India (SEBI) has raised the FPI investment limit in central government securities to Rs 1.85 lakh crore. This move by the market regulator will boost inflows of foreign funds into Indian capital markets.

Securities Exchange Board of India (SEBI) has raised the FPI investment limit in central government securities to Rs 1.85 lakh crore. This move by the market regulator will boost inflows of foreign funds into Indian capital markets.

Earlier, the limit for foreign portfolio investors (FPIs) was Rs 1.52 lakh crore.

In India, the central government issues both, treasury bills and bonds or dated securities. The state governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).

SEBI has also decided to revise the limit for investment by long-term FPIs (sovereign wealth funds, insurance funds, pension funds and foreign central banks) in government securities to Rs 46099 crore, from Rs 68000 crore. At the same time, the limit for investment by all FPIs in state development loans (SDL) increased 28.57 per cent to Rs 27000 crore.

SEBI’s move is in line with RBI revising the limit for investment by FPIs in government securities for Q1FY18.

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