The Reserve Bank of India (RBI) today allowed foreign institutional investors (FIIs) to invest up to $25 billion, up from existing limit of $5 billion, in bonds and debentures of Indian infrastructure companies.
FIIs registered with the Securities and Exchange Board of India (Sebi) would also be allowed to invest in non-convertible debentures and bonds issued by non-banking financial companies categorised as 'Infrastructure Finance Companies' (IFCs) by RBI within the overall limit of $25 billion, the central bank said in a notification.
This was subject to conditions that such instruments shall have a residual maturity of five years or above and the investments would have a lock-in-period of three years, it said.
This lock-in-period shall be computed from the time of first purchase by FIIs, it said.
These changes would also apply for QFI investment in units of mutual fund debt schemes within the limit of $3 billion, it said.
It is to be noted that the government relaxed norms allowing foreign investors to invest in infrastructure bonds and trade such instruments among themselves in September.