The Reserve Bank of India (RBI) might soon increase foreign portfolio investment in the corporate bond market by around $2 billion from the current limit of $51 billion.
The central bank and the finance ministry are said to have decided upon the matter and an official notification is expected before the end of this month.
According to the website of the National Securities Depository, 99.2 per cent of the $51-billion cap has already been utilised as on September 15. An official told Business Standard that the overall FPI limit in India’s debt market would not be raised. “The FPI limits from other unutilised or underutilised segments will be shifted to the corporate bond markets,” the official said.
For example, the FPI limits in securitised debt instruments and state development loans remained heavily underutilised, with only 23 per cent and 12.3 per cent of the limits being used as on Friday, the NSDL website showed.