RBI Expands Investment Avenues for Overseas Investors in Corporate Debt
The Reserve Bank of India has opened new avenues for overseas residents, allowing them to invest in corporate debt securities via Special Rupee Vostro Accounts. Previously limited to central government securities, this change accompanies a draft rationalizing external commercial borrowing regulations, aiming to attract more credit flow.
- Country:
- India
In a bid to enhance foreign investment in Indian corporate debt, the Reserve Bank of India (RBI) announced on Friday that individuals living abroad can now invest through Special Rupee Vostro Accounts (SRVAs). Previously, these investments were confined to central government securities.
Following this policy update, non-convertible debentures, bonds, and commercial papers issued by Indian companies are now accessible to these investors, subject to Foreign Portfolio Investor guidelines. The rule change has been implemented with immediate effect, indicating a swift shift in strategy by the RBI.
Additionally, RBI released a draft on simplifying the External Commercial Borrowing (ECB) framework, proposing changes such as linking borrowing limits to financial strength and allowing market-determined interest rates. This initiative, announced on October 1, seeks feedback by October 24, reflecting a proactive approach to invigorating economic engagement with international stakeholders.
(With inputs from agencies.)
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