RBI restricts G-sec debt portfolio flows

The plan is to allow foreign investors access to 5% of the govt bonds by March 31 next year

The Reserve Bank of India (RBI) on Monday tweaked the norms for future limits available for foreign portfolio investors (FPI) investing in government bonds, stating that 75 per cent of the future limit should go to long-term investors, and what would remain unutilised would not be freed up for the general category.

The plan is to allow foreign investors access to 5 per cent of the government bonds and 2 per cent of the state development loans by March 31 next year, in phases. 

As part of that measure, the central bank increased the limit for FPI play in government bonds, applicable