iconimg Sunday, August 30, 2015

Press Trust Of India
Mumbai, July 23, 2014
The Reserve Bank on Wednesday said the FII limit for investment in government securities has been increased by $ 5 billion within the total cap of $ 30 billion. The central bank said the limit has been enhanced by reducing the investment limit for long term investors from $ 10 billion to $ 5 billion.

"It has been decided to enhance the investment limit in Government securities available to FIIs (Foreign Institutional Investors)/QFIs (Qualified Foreign Investor)/FPIs (Foreign Portfolio Investors) by $ 5 billion by correspondingly reducing the amount available to long-term investor from $ 10 billion to $ 5 billion within the overall limit of $ 30 billion," an RBI notification said.

Long-term investors include sovereign wealth funds (SWFs), multilateral agencies, pension, insurance funds and foreign central banks registered with Sebi.

Earlier this year, the limit for long-term investors for investment in government securities was raised from $ 5 billion to $ 10 billion within the total limit of $ 30 billion available to them.

The RBI, however, said the increment investment limit of $ 5 billion shall be required to be put in government bonds with a minimum residual maturity of three years.

It further said all future investment against the limit vacated, when the current investment by an FII/QFI/FPI runs off either through sale or redemption shall, also be required to be made in Government bonds with a minimum residual maturity of three years.

"There will be no lock-in period and FIIs/QFIs/FPIs shall be free to sell the securities to the domestic investors," the notification said.