The central bank has also raised
FII investment in government securities with immediate effect by $5 billion to
the RBI allowed qualified foreign investors (QFIs) to invest in mutual fund
schemes that hold at least 25% of their assets (either in debt or in equity or
both) in the infrastructure sector under the current $3 billion sub-limit for
investment in mutual funds related to infrastructure. This relaxation would be
subject to review, it said.
QFIs were allowed to invest in MF debt schemes up
to a limit of $3
billion within the overall limit of $25 billion for FII investment in
non-convertible debentures/bonds issued by Indian companies in the
The central bank has also slashed the lock-in period for
investments in infrastructure debt funds (DFs) for non-resident investments to one year. It said that the residual maturity of the
instrument at the time of first purchase by an FII/eligible IDF investor should
be at least 15 months. “Any reduction in lock-in for foreign investors
in infrastructure funds would definitely help mutual funds,” says Debashish
Mallick, CEO & MD, IDBI Mutual Fund.
Fund officials say that they have to wait for the
final guidelines from SEBI.
The RBI also raised FII investment limit in
government securities with immediate effect by $5 billion to $20 billion.