Mumbai, June 5 (IANS). Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday announced that the investment limit for NRIs (non-resident Indians) and OCIs (overseas citizens of Indian origin) to invest in stock market-traded equity instruments without SEBI registration is being increased.
The same facility will now be made available to all individual foreign resident individuals (PROIs) on par with NRIs and OCIs, he said in his address after the Monetary Policy Committee (MPC) meeting.
“To encourage External Commercial Borrowings (ECB) by Public Sector Undertakings (PSUs), concessional foreign currency swap facility will be made available till September 30, 2026. Additionally, a similar facility of bearing the entire hedging cost for raising new FCNR (B) deposits of 3 to 5 years will also be extended to Authorized Dealer (AD) banks till September 30, 2026,” the Governor said.
With a view to attract foreign capital, RBI has decided to expand the scope of “specified securities” to government securities under the fully accessible route (FAR). Under this, all new government securities (G-Secs) with tenures of 15 years, 30 years and 40 years will be included.
Malhotra said the limitations on short-term investments, investment concentration and individual securities applicable to investments by foreign portfolio investors (FPIs) under the general route are also being removed.
He said these steps and the tax benefits announced by the government on Friday morning will help in attracting foreign capital for government borrowing.
The RBI Governor said that it has been proposed to again extend the timeline for receipt of export earnings to 9 months.
He said, “These measures are expected to strengthen the country’s balance of payments. We will also continue to make necessary policy changes to promote exports and attract capital inflows.”
Sanjay Malhotra clarified that no change has been made in India’s exchange rate policy.
“We do not target any particular exchange rate or limit it. The exchange rate is allowed to be determined by market forces,” he said.
However, he also said that sometimes speculative pressure during times of increased uncertainty can lead to market fluctuations that are not in line with economic fundamentals and can impact economic activity.
The RBI Governor said the central bank does not aim to prevent natural movements dictated by the market, but will take necessary steps to control excessive volatility and disorderly market movements.
He stressed that the RBI will remain vigilant in maintaining stability in the financial markets and preventing unnecessary fluctuations.
–IANS
DBP