MUMBAI : Reserve Bank of India (RBI) allowed foreign portfolio investors (FPIs) to put their money in unlisted corporate debt securities as well as securitised debt instruments. The move is part of larger efforts to attract more overseas investments. “As announced in the Union Budget 2016-17, it has now been decided to expand the investment basket of eligible instruments for investment by FPIs under the corporate bond route,” RBI notification said. FPIs can invest in unlisted corporate debt securities that are in the form of “non-convertible debentures/bonds” issued by public and private companies provided they have a minimum residual maturity of 3 years. Besides, the end use of such instruments should be only for real estate business, capital market and purchase of land, notification. added.
According to the RBI, investment by FPIs in the unlisted corporate debt securities and securitised debt instruments shall not exceed Rs 35,000 crore within the extant investment limits prescribed for corporate bond from time to time, which currently is Rs 2,44,323 crore. “Further, investment by FPIs in securitised debt instruments shall not be subject to the minimum 3-year residual maturity requirement,” RBI said. The central bank, however, added that all other existing conditions for investment by FPIs in the debt market remain unchanged and the revised norms will be reviewed after one year. (AGENCIES)
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