Seeking to narrow the current account deficit (CAD), the finance ministry increased FII limits in government securities and corporate bonds by $5 billion each, taking the total investment limit in domestic debt to $75 billion.
“As far as FII (foreign institutional investors) debt limit is concerned, two new categories have been created. One $5 billion in government securities without any stipulated residual which will be open to pension fund, central banks, sovereign wealth funds. Other $5 billion will be open for corporate bond and Gilt. So the overall limit goes up from $65 billion to $75 billion,” sources said.
The overall limit of domestic debt is distributed through a host of categories across government, corporate and infrastructure debt. This would bring in additional long-term funds into India, they said adding that the guidelines would be notified in 7-10 days by the Reserve Bank on India (RBI).
(Published 01 December 2012, 16:39 IST)