RBI allows Multilateral and Regional financial institutions to invest in rupee denominated bonds

RBI/2016-17/233
A. P. (DIR Series) Circular No.31 February 16, 2017
To
All Authorised Dealer Category – I Banks
Madam/Sir
Issuance of Rupee denominated bonds overseas – Multilateral and Regional
Financial Institutions as Investors
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to paragraph
No. 4 of A. P. (DIR Series) Circular No. 60 dated April 13, 2016 and paragraph No.
3.3.3 of Master Direction No.5 dated January 1, 2016 on ‘External Commercial
Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised
Dealers and Persons other than Authorised Dealers’ as amended from time to time
about the criteria of recognized investors in the Rupee denominated bonds issued
overseas.
2. In order to provide more choices of investors to Indian entities issuing Rupee
denominated bonds abroad, it has been decided to also permit Multilateral and Regional
Financial Institutions where India is a member country, to invest in these Rupee
denominated bonds.
3. All other provisions of the aforesaid circular dated April 13, 2016 and applicable
provisions of A. P. (DIR Series) Circular No. 29 dated September 29, 2015 remain
unchanged. AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers.
4. The changes/revised instructions in respect of issuance of Rupee denominated
bonds will be applicable from the date of issuance of this circular.
5. Relevant paragraphs of the Master Direction No.5 dated January 1, 2016 issued by
the Reserve Bank are being updated to reflect the changes.
6. The directions contained in this circular have been issued under section 10(4) and
11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
(Deepak Kumar)
Chief General Manager