Limit for investment in FPIs rises

Q.  How much has the limit for investment in FPIs in central government securities risen by?
- Published on 03 Apr 17

a. INR 110 billion
b. INR 60 billion
c. INR 170 billion
d. INR 120 billion

ANSWER: INR 110 billion
RBI increased the foreign portfolio investors' limits on investment in government bonds by INR 170 bn for the April-June period.

Limit for investment by FPIs in central government securities has risen by INR 110 bn while the same for SDLs rose by INR 60 bn.

On the central government securities, the cap on general category has been increased to INR 1565 bn from 1520 bn. For long term investors, the limit has risen to INR 745 bn from INR 680 bn earlier.

Total increase in investment caps for FPIs in g-secs is up INR 2310 bn from INR 2200 bn.

On the SDLs, the cap on investment by FPIs including long term ones has been moved to INR 270 bn from the earlier INR 210 bn.

The limits for the long term investors remaining unutilised at the end of March 2017 will be released for investment under the general category in April 2017.

Existing conditions, including the security-wise limits, investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, will continue to apply.

The operational guidelines relating to allocation and monitoring of limits will be issued by capital markets regulator SEBI.

RBI: Know More
  • The Reserve Bank of India is the central bank of the country.
  • The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission.
  • The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis for the functioning of the Bank, which commenced operations on April 1, 1935.
  • After the partition of India, the Reserve Bank served as the central bank of Pakistan upto June 1948 when the State Bank of Pakistan commenced operations.
  • The Bank, which was originally set up as a shareholder’s bank, was nationalized in 1949.

  • SEBI: Know More

  • Founder: Government of India
  • Founded: 12 April 1988
  • Headquarters: Mumbai
  • Number of employees: 643 (2012)
  • Present chairman: Ajay Tyagi

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