Question

Consider the following statements regarding recent RBI reforms on Foreign Portfolio Investors (FPIs) in corporate debt securities: 1. The Reserve Bank of India (RB

Q: Answer-Consider the following statements regarding recent RBI reforms on Foreign Portfolio Investors (FPIs)...

Statement 1 Correct. The RBI has scrapped the short-term investment limit for FPIs in corporate debt securities. This makes it easier for FPIs to participate without maturity-linked restrictions. Statement 2 Incorrect. The earlier rule was not 25 but 50 cap, i.e., FPIs including related entities could not invest more than 50 of any single corporate debt issue. Statement 3 Correct. The reform is explicitly intended to deepen Indias corporate bond market and attract more stable foreign investment, particularly at a time when inflows have been volatile. Hence, the correct answer is 1 and 3 only.

I has removed the short-term investment limit for FPIs in corporate debt. 2. Earlier, FPIs were restricted to investing not more than 25% of any corporate debt issue. 3. The recent reform is aimed at deepening the corporate bond market and attracting more stable foreign investment. Which of the above statements is/are correct?

A 1 and 2 only

B 2 and 3 only

C 1 and 3 only

D 1, 2 and 3

E 3 only

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