RBI hikes equity investment limits for NRIs, OCIs

The Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday announced that the limits for investment by NRIs and OCIs in equity instruments traded on the stock market without SEBI registration are being increased.

Further, the same facility is being extended to all individual Persons Resident Outside India (PROIs) at par with NRIs and OCIs, he remarked during his speech after the Monetary Policy Committee (MPC) meeting.

“Third, a facility of concessional forex swap will be provided till 30th September 2026 to incentivise ECBs by PSUs. Fourth, a similar facility for bearing the full hedging cost shall be provided till 30th September 2026 to AD banks for raising fresh 3–5-year FCNR (B) deposits,” the Governor informed.

To attract foreign capital, for government securities under the Fully Accessible Route (FAR), “we are expanding the universe of ‘specified securities’ by including all new issuances of 15-, 30- and 40-year tenor G-secs”.

“In addition, limits pertaining to short-term investment, concentration and individual securities on FPI investment under the General Route are being removed. These measures along with the tax benefits provided by the government this morning should help attract foreign capital for government borrowing,” said Malhotra.

Also, it is proposed to restore the time for realisation of export proceeds to nine months, he added.

“While these measures are expected to strengthen our balance of payments, we will continue to make the right policy adjustments to further promote exports and attract and incentivise capital inflows,” hem mentioned.

India’s exchange rate policy remains unchanged and “We do not target any specific level or band; instead, we allow the exchange rate to be determined by market forces”, he said.

“Our experience, however, suggests that it may sometimes witness movements, often caused by speculative pressures, especially in the wake of heightened uncertainty, that are not in sync with fundamentals and are disruptive of economic activity. While our objective is not to resist market-driven adjustments, we will curb excessive volatility and prevent disorderly market movements,” he stressed.