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RBI Eases FPI Rules for Corporate Bonds to Attract More Foreign Investment.

Banking & Finance | Dated: 14 May 2025

In May 2025, the Mumbai (Maharashtra)-based Reserve Bank of India (RBI) eased investment norms for Foreign Portfolio Investors (FPIs) in local corporate bonds by removing both the "short-term debt investment limits" and the "concentration limits", with the objective of enhancing investment convenience and encouraging foreign inflows.

🎯 Key Highlights:

  • - As per RBI’s notification, the revised norms have come into effect immediately.
  • - Under the earlier framework, FPIs’ investments in corporate bonds with a residual maturity of up to one year were capped at 30% of their total corporate bond investments, calculated on an end-of-day basis.
  • - Additionally, individual FPIs (along with their related entities) were restricted to 15% of the long-term FPI investment limit and 10% for others in corporate debt securities.

💡 Other Important Facts:

  • (i) As per the RBI's Digital Lending Directions 2025, all Banks and other Regulated Entities (REs) must now report the details of their Digital Lending Applications (DLAs) through the Centralised Information Management System (CIMS) portal of RBI.
  • (ii) According to the circular, the CIMS portal will be live for reporting from May 13, 2025, and all REs are instructed to upload their initial data by June 15, 2025.

📚 Test Your Knowledge:

Recently, which organization eased norms for FPIs investing in corporate bonds to boost foreign inflows?

Correct Answer: Reserve Bank of India

🚀 Quick Recap:

About RBI

  • Governor : Sanjay Malhotra
  • Headquarter : Mumbai