"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.