The Reserve Bank of India is expected to extend the time frame for settling Government bond trades to two days from one day for foreign institutional investors starting in April, two sources aware of the plans told Reuters.
The change comes after the RBI had in September announced it would switch to so-called T+2 settlements, from the current T+1 system.
Foreign investors had been requesting an extra day to allow them to better fulfil all the operational guidelines needed to settle trades, including currency conversions.
"We are hopeful of starting T+2 for FIIs (foreign institutional investors) in April," said a top policy maker directly aware of the discussions.
The April deadline was confirmed by a senior official at a bank who cited RBI communications to markets.
Both sources declined to be identified since the plans have not been made public.
The RBI is also in talks with settlement platform Clearing Corporation of India (CCIL) to ensure the change goes smoothly, said the sources.
Indian Government bonds have benefited from a surge in interest from foreign investors, who have nearly exhausted the current limits of $30 billion.