New foreign portfolio investment norms from April: RBI

These new norms will facilitate the investment process and hedging by FPIs, keeping in view the macro-prudential parameters

The Reserve Bank on Wednesday said it will review the foreign portfolio investment norms and come out with a new set of regulations, to be effective next April.

The new norms will facilitate the process of investment and hedging by Foreign Portfolio Investors (FPIs), keeping in view the macro-prudential parameters, said the statement on developmental and regulatory policies by the Reserve Bank of India (RBI).

"Regulatory changes to be finalised in consultation with the Government of India and the Securities Exchange Board of India (SEBI) will be effective from April 2018," it said.

Noting that the regulatory regime for FPI debt investments in India is a part of the larger framework for capital account management, it said this framework has evolved over the years, influenced by capital flows and evolving macroeconomic conditions.

RBI also decided to broaden non-resident centralised treasuries of multinational companies to hedge the rupee (INR) risk on current account transactions of their Indian subsidiaries.

"This is expected to facilitate internationalisation of the rupee by encouraging rupee invoicing of trade transactions while also encouraging non-residents to hedge INR risks onshore," it said.