The Government has hiked the investment limit for foreign portfolio investors in government bonds by $5 billion to $30 billion.

However, the enhanced limit of $5 billion will be available for investments only to foreign central banks, sovereign wealth funds, multilateral agencies, endowment funds, insurance funds and pension funds.

In a late evening announcement on Wednesday, capital market regulator SEBI also said that the amount of $5 billion together with the unutilised amount of Rs 29,812 crore (about $6.2 billion) as on May 31 will be immediately available for investment on tap by these investors.

The amount not utilised as on June 18 (out of the current unutilised limit of Rs 29,812 crore) will be put on auction on June 20.

Special window

For FIIs that have exhausted their reinvestment limits, as a one-time measure, a special window of $250 million will be available. However, investments using this special window will have a 90-day lock-in, SEBI said.

Raghuram Rajan, Chief Economic Advisor to the Finance Ministry, had recently said that more steps would be announced to encourage foreign portfolio flows into India.

srivats.kr@thehindu.co.in

(This article was published on June 13, 2013)
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