loader

Disclaimer

The Bar Council of India does not permit advertisement or solicitation by advocates in any form or manner. By accessing this website, www.khaitanco.com, you acknowledge and confirm that you are seeking information relating to Khaitan & Co of your own accord and that there has been no form of solicitation, advertisement or inducement by Khaitan & Co or its members. The content of this website is for informational purposes only and should not be interpreted as soliciting or advertisement. No material/information provided on this website should be construed as legal advice. Khaitan & Co shall not be liable for consequences of any action taken by relying on the material/information provided on this website. The contents of this website are the intellectual property of Khaitan & Co.

Please accept the above
Close

Search

See all results for ""

FPI - Investment in debt and voluntary retention route - further relaxations introduced

27-Jan-2020

The Reserve Bank of India (RBI) revised the features of investment by Foreign Portfolio Investors (FPIs) in India vide two circulars published on 22 January 2020, namely the circular on FPI investment in debt (FPI Investment Circular) and Voluntary Retention Route’ (VRR) for FPIs investment in debt (VRR Circular).

By way of the FPI Investment Circular, the RBI has introduced the following changes in relation to FPI investments in debt:

Ø   

The short term investment limits for FPIs in i) Central Government Securities (including Treasury Bills), ii) State Development Loans and iii) Corporate bonds has been increased from the erstwhile limit of 20% to 30% of the total investment of the FPI in the Central Government Securities (including Treasury Bills) or State Development Loans or Corporate bonds, as the case may be; and

Ø   

Similar to exemptions from short term investment limits afforded to FPI in case of investment in security receipts, the FPI Investment circular has extended the said exemption to FPI investment in debt instruments issued by asset reconstruction companies and debt instruments issued by an entity under the corporate insolvency resolution process as per the resolution plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016.

By way of the FPI VRR Circular, the RBI has announced the following revisions to the FPI VRR route of investment:

Ø   

The cap on investment under VRR has been increased to INR 1,50,000 crores from INR. 75,000 crores.

Ø   

FPIs that have been allotted investment limits under VRR may, at their discretion, transfer their investments made under the General Investment Limit available to FPI to VRR.

Ø   

The scope of instruments that FPIs can invest in has been expanded under VRR to also include Exchange Traded Funds that invest only in debt instruments.

Comment:

With this move, the RBI has bolstered its intention to facilitate and encourage investment by Foreign Portfolio Investors in India by allowing further exemptions and by increasing investment limits.

-   Manisha Shroff (Partner), Nandini Paliwal (Associate) and Siddhant Shetty (Associate)

For any queries please contact: editors@khaitanco.com

Manisha Shroff (partners)

We have updated our Privacy Policy, which provides details of how we process your personal data and apply security measures. We will continue to communicate with you based on the information available with us. You may choose to unsubscribe from our communications at any time by clicking here.

For private circulation only

The contents of this email are for informational purposes only and for the reader’s personal non-commercial use. The views expressed are not the professional views of Khaitan & Co and do not constitute legal advice. The contents are intended, but not guaranteed, to be correct, complete, or up to date. Khaitan & Co disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident or any other cause.

© 2024 Khaitan & Co. All rights reserved.

Mumbai

One World Centre
10th, 13th & 14th Floor, Tower 1C
841 Senapati Bapat Marg
Mumbai 400 013, India

Mumbai

One Forbes
3rd & 4th Floors, No. 1
Dr. V. B. Gandhi Marg
Fort, Mumbai 400 001

Delhi NCR (New Delhi)

Ashoka Estate
11th Floor, 1105 & 1106,
24 Barakhamba Road,
New Delhi 110 001, India

Kolkata

Emerald House
1B Old Post Office Street
Kolkata 700 001, India

Bengaluru

Embassy Quest
3rd Floor
45/1 Magrath Road
Bengaluru 560 025, India

Delhi NCR (Noida)

Max Towers,
7th & 8th Floors,
Sector 16B, Noida
Uttar Pradesh 201 301, India

Chennai

8th Floor,
Briley One No.30
Ethiraj Salai
Egmore
Chennai 600 008, India

Singapore

Singapore Land Tower
50 Raffles Place, #34-02A
Singapore 048623

Pune

Raheja Woods
03-108-111, 3 Floor
8, Central Avenue, Kalyani Nagar
Pune - 411 006, India

Gurugram (Satellite Office)

Suite No. 660
Level 6, Wing B,
Two Horizon Center
Golf Course Road, DLF 5
Sector 43, Gurugram
Haryana 122 002, India

Ahmedabad

1506 - 1508, B-Blockr
Navratna Corporate Parkr
Iscon Ambli Road, Ahmedabadr
Gujarat - 380058