RBI widens FPI’s avenue in corporate bonds

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By Rajeev Jhawar (finserv@vinodkothari.com)

In recent times, the Government of India has liberalized the framework for raising External Commercial Borrowings(ECB) by Indian companies [read our article on this topic here]. Another change that we think can do good to India is the relaxation in the regulations for investments by Foreign Portfolio Investments(FPI).

The primary regulator for both the regime falls under the gamut of RBI because of the nature of capital account transaction between a resident and a non-resident. Since the FPI route consists of investment into the capital markets it is also regulated by the Securities and Exchange Board of India (SEBI), the primary capital market regulator in India.

The RBI vide its notification dated 27th April,2018, amended on 1st May ,2018 to relax their terms of investments in corporate bonds and in this write up we intend to analyze the same. Read more →