The Reserve Bank of India issued a circular to Authorised Dealer Category-I banks setting Foreign Portfolio Investor (FPI) limits for investment in Indian debt instruments for financial year 2025-26 and the aggregate limit for credit default swaps (CDS) sold by FPIs. The percentage-based caps on FPI holdings remain unchanged, while revised absolute limits have been notified for two half-year periods. For 2025-26, the limits for FPI investment in Government Securities (G-Secs), State Government Securities (SGSs) and corporate bonds remain at 6 per cent, 2 per cent and 15 per cent, respectively, of outstanding stocks. Investments in ‘specified securities’ continue to be reckoned under the Fully Accessible Route (FAR). The split of incremental changes in the G-Sec limit is retained at 50:50 between ‘General’ and ‘Long-term’, while the entire increase in SGS limits is allocated to the ‘General’ sub-category. In absolute terms, the total debt limit is set at INR 13,82,989 crore for April–September 2025 and INR 14,70,654 crore for October 2025–March 2026, with corresponding category limits for G-Secs, SGSs and corporate bonds. For CDS, the aggregate notional amount sold by FPIs remains capped at 5 per cent of the outstanding stock of corporate bonds, and an additional limit of INR 2,93,612 crore is set out for 2025-26. The circular provides half-yearly revised limits for April–September 2025 and October 2025–March 2026 and asks AD Category-I banks to inform constituents.

Original source View in tracker