RBI eases foreign investment rules for corporate debt
The move potentially freed up 440 billion rupees ($6.79 billion) of debt available to offshore investors.
Access to the corporate bonds by foreign investors will be phased in over the next two quarters — 270 billion rupees during October-December and 170 billion rupees in January-March, the Reserve Bank of India said in a circular.
Rupee-denominated bonds — more widely known as masala bonds — will now come under rules for external commercial borrowings and issuers will have to take prior permission from the RBI to raise the paper.
Earlier these masala bonds used to be classified under the foreign portfolio investment limit for corporate bonds that stands at 2.44 trillion rupees. This total limit has been fully taken up following massive foreign inflows.
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