| Date: |
26-11-2015
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| Notification No: |
RBI/2015-16/253 A.P. (DIR Series) Circular No. 31
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
RBI/2015-16/253 |
| Subject: |
Investment by Foreign Portfolio Investors (FPI) in Corporate Bonds
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RBI/2015-16/253
A.P. (DIR Series) Circular No.31
November 26, 2015
To
All Authorised Persons
Madam/ Sir,
Investment by Foreign Portfolio Investors (FPI) in Corporate Bonds
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by
a Person Resident outside India) Regulations, 2000 notified vide
Notification
No. FEMA.20/2000- RB dated May 3, 2000, as amended from time to time and to A.P.
(DIR Series)
Circular No. 71 dated February 3, 2015 and
A. P. (DIR Series)
Circular No.73 dated February 6, 2015 in terms of which all future investments
by Foreign Portfolio Investors (FPI) in NCDs/bonds shall be required to be made
in securities with a minimum residual maturity of three years.
- On a review, it has been decided to permit FPI to acquire NCDs/bonds,
which are under default, either fully or partly, in the repayment of
principal on maturity or principal installment in the case of amortising
bond. The revised maturity period of such NCDs/bonds, restructured based on
negotiations with the issuing Indian company, should be three years or more.
- The FPI which propose to acquire such NCDs/bonds under default should
disclose to the Debenture Trustees the terms of their offer to the existing
debenture holders / beneficial owners from whom they are acquiring. Such
investment should be within the overall limit prescribed for corporate debt
from time to time (currently Rs. 2443.23 billion). All other existing
conditions for investment by FPIs in the debt market remain unchanged.
- The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)
and are without prejudice to permissions/approvals, if any, required under
any other law. AD Category – I banks may bring the contents of this circular
to the notice of their constituents and customers concerned.
Yours faithfully,
(R.Subramanian)
Chief General Manager
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