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ARTICLE · 30 NOVEMBER 2012

Investment In Corporate Debt By QFIs

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For larger participation of new category of overseas investor i.e. Qualified Foreign Investors ("QFIs") to invest in Indian Secondary Market, both Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) has issued guidelines allowing overseas individual investors to invest up to $1 billion in corporate bonds and debt schemes of mutual funds without any lock-in period or residual maturity clause. RBI vide RBI/2012-13/134 A. P. (DIR Series) Circular No. 7 dated 16th July, 201

IndiaFinance and Banking
Vijayta Parmar
Vijayta Parmar
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Introduction

For larger participation of new category of overseas investor i.e. Qualified Foreign Investors ("QFIs") to invest in Indian Secondary Market, both Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) has issued guidelines allowing overseas individual investors to invest up to $1 billion in corporate bonds and debt schemes of mutual funds without any lock-in period or residual maturity clause. RBI vide RBI/2012-13/134 A. P. (DIR Series) Circular No. 7 dated 16th July, 2012 and SEBI vide circulars CIR/ IMD/ FII&C/ 17 / 2012 dated 18th July, 2012 has decided to allow QFIs to purchase debt securities on repatriation basis.

Background

In 2011, the Government of India ('GOI') announced its intention to widen the class of foreign investors investing in Indian financial markets. The Indian Finance Minister in his Budget speech then, announced that foreign investors would be allowed to invest in domestic Mutual Funds ('MFs')

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