The Reserve Bank of India (RBI) on April 06, 2026, issued circular regarding the Limits for investment in debt and sale of Credit Default Swaps by Foreign Portfolio Investors (FPIs).
The RBI has issued revised guidelines for Foreign Portfolio Investor (FPI) investment limits in debt instruments for FY 2026–27, under the Foreign Exchange Management Act, 1999 and related regulations. AD Category-I banks have been directed to take note and inform their clients accordingly.
For FY 2026–27, the investment limits under the General Route remain unchanged at 6% for Government Securities (G-Secs), 2% for State Government Securities (SGSs), and 15% for corporate bonds. The allocation of incremental changes in G-Sec limits continues in a 50:50 ratio between ‘General’ and ‘Long-term’ categories, while increases in SGS limits are fully assigned to the ‘General’ category. Investments in specified securities will continue under the Fully Accessible Route (FAR), and from April 1, 2026, investments under the Voluntary Retention Route (VRR) will be aligned with General Route limits.
The circular also provides revised half-yearly limits in absolute terms for G-Secs, SGSs, and corporate bonds, along with a total debt ceiling. Additionally, the limit for Credit Default Swaps (CDS) sold by FPIs is set at 5% of outstanding corporate bonds, translating to ₹3,30,464 crore for FY 2026–27.
The earlier circular dated April 3, 2025 for FY 2025–26 stands withdrawn. These directions have been issued under Sections 10(4) and 11(1) of FEMA, 1999.
[Circular No. RBI/2026-27/07 A.P. (DIR Series) Circular No. 05]
