PBOC has been on the government's radar since it raised its stake in Housing Development Finance (HDFC) to slightly over 1 percent.
Market regulator Securities and Exchange Board of India (SEBI) has renewed the foreign portfolio investor (FPI) licence of China's central bank.
SEBI has renewed the licence for People's Bank of China (PBOC) for three years, according to a report by The Economic Times.
Moneycontrol could not independently verify the report.
PBOC has been on the government's radar since it raised its stake in Housing Development Finance (HDFC) to slightly over 1 percent.
SEBI and PBOC have not yet responded to requests for comment by The Economic Times.
PBOC had made several representations to the finance ministry regarding the FPI license, sources told the paper.
The move comes at a time when investments from Chinese companies are coming under greater scrutiny in India and a few other countries. There is a fear that Chinese companies are picking up stakes while taking advantage of the lower stock prices caused by the COVID-19 pandemic.
"The renewal of licence would give a sense of stability and continuity for FPIs based out of China and Hong Kong," an official at a global custodian bank told the paper.
"It also reiterates the current regulatory position that there are no restrictions on portfolio investments coming from China," the report added.
At least six Chinese companies have FPI licenses that are due for renewal in the next few months, the report said.
A separate report by Reuters said the government may tighten scrutiny of FPIs from China and Hong Kong and China.
India has 111 registered FPIs from Hong Kong and 16 from China, the report added.
In April, the government said foreign direct investment (FDI) from neighbouring nations is permitted through the approval route only.
