FPIs in defaulted corporate bonds will be exempt from the short-term limit and the minimum residual maturity requirement under the Medium Term Framework (MTF).

 

At present, FPIs can invest in security receipts and debt instruments issued by Asset Reconstruction Companies and debt instruments issued by an entity under the insolvency process and these investments are exempted from the short-term  limit and minimum residual maturity requirement under the MTFs for investment by FPIs in corporate bonds.

 

"In order to further promote investment by FPIs in corporate bonds, it is proposed to extend similar exemptions to defaulted corporate bonds," RBI Governor Shaktikanta Das said on Friday.