Investment by FPIs in Municipal Bonds

As a measure to broaden access to debt instruments in India for non-resident investors, RBI has, by its circular dated April 25, 2019, permitted FPIs to invest in municipal bonds (i.e. debt instruments issued by municipalities constituted under Article 243Q of the Constitution of India), which investment will be reckoned within the limits applicable for FPI investments in State development loans. The Securities and Exchange Board of India (‘SEBI’) has also, by its circular dated May 8, 2019, permitted FPIs to invest in municipal bonds.

Published In:Inter Alia - Quarterly Edition - July 2019 [ English
Date: July 31, 2019