RBI allows investors to invest in credit enhanced bonds

Investment permitted up to $5 bn within overall limit

The Reserve Bank of India (RBI) has decided to allow various investors to invest in the credit enhanced bonds up to a limit of $5 billion within the overall limit of $51 billion earmarked for corporate debt, said RBI on Monday.

These investors include Securities and Exchange Board of India (Sebi) registered Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs) and long term investors registered with Sebi – Sovereign Wealth Funds (SWFs), multilateral agencies, pension/ insurance/ endowment funds and foreign central banks.

Earlier RBI had said that these parties may purchase, on repatriation basis, government securities and non-convertible debentures (NCDs) / bonds issued by an Indian company subject to norms and limits as prescribed by RBI and Sebi from time to time.

The present limits for investments by FIIs, QFIs and long term investors registered with Sebi in government securities and corporate debt stands at $30 billion and $51 billion, respectively.