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The Finance Ministry has allowed foreign institutional investors (FIIs) to invest $5 billion more in Government securities. The increased limit will be applicable to the corporate bonds also.
For Government paper, the present limit is $10 billion which will be enhanced to $15 billion.
For corporate bonds, the limit has been hiked to $20 billion from $15 billion now.
The incremental limit will be applicable from the date of notification. Market regulator Securities and Exchange Board of India (SEBI) is expected to issue a circular giving effect to these changes in the next few days.
Mr Thomas Mathew, Joint Secretary, in-charge of the capital market in the Finance Ministry, said, "We need more FIIs to invest in India. Second, the existing limit is almost exhausted."
As on October 31, FIIs have invested Rs 41,253 crore in Government securities against the limit of Rs 43,650 crore. On the other hand, corporate bonds managed to get Rs 68,289 crore against a ceiling of Rs 74, 416 crore. There is little space available for further FII investments in Government securities and corporate bond markets, he added.
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