RBI Governor meets foreign investors in Hong Kong

This is his first interaction abroad with investors after taking over as the RBI’s governor in December last year. Since he took over as 25th RBI Governor, he has hold a series of meeting with various stakeholders including heads of public sector banks, private sector banks, non-banking financial services, and industry chambers.

The RBI last week proposed removal of 20 percent foreign portfolio investor (FPI) restriction on the corporate debt market. It was stipulated that no FPI should have an exposure of more than 20 percent of its corporate bond portfolio to a single corporate, including exposure to entities related to the corporate. This was decided as a part of the review of the FPI investment in corporate debt undertaken in April 2018.

FPIs were given exemption from this requirement on their new investments till the end of March 2019 to adjust their portfolios.

While the provision was aimed at incentivising FPIs to maintain a portfolio of assets, market feedback indicates that foreign investors have been constrained by this stipulation.