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RBI opens certain series of government securities for non-resident investors
Mar-31-2020

The Reserve Bank of India (RBI) has opened certain series of government securities (G-secs) for non-resident investors as part of an initiative to deepen the bond market. Accordingly, a separate route namely, Fully Accessible Route (FAR) for investment by non-residents in securities issued by the Government of India has been notified.  The move follows the Union Budget 2020-21 announcement that certain specified categories of Central government securities would be opened fully for non-resident investors without any restrictions, apart from being available to domestic investors as well. This will come under overall foreign portfolio investor (FPI) limit of above 6 percent but those falling under specified securities can be subscribed without any restriction.

This will be effective from the date on which the scheme comes into effect and the directions will come into effect from April 1. The Reserve Bank shall notify the Government securities that shall be eligible for investment under the FAR. These securities will continue to be eligible for investment by residents. ‘Specified securities’, once so designated, shall remain eligible for investment under the FAR until maturity.

In addition, all new issuances of Government securities of 5-year, 10-year and 30-year tenors from the financial year 2020-21 will be eligible for investment under the FAR as ‘specified securities’. The Reserve Bank may add new tenors or change the tenors of new securities to be designated as ‘specified securities’ from time to time. FPIs, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other entities permitted to invest in Government Securities under the Debt Regulations can invest under this route. 

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