RBI extends time to settle GSec for FPIs to two days from April 6

MUMBAI: The Reserve Bank today said it is extending time for settling government bond trades to two days beginning April 6, 2015, in a bid to address operational issues faced by foreign investors.

"It has now been decided in consultation with market participants, to permit settlements on T+2 basis for outright secondary market transactions in government securities undertaken by FPIs," the central bank said in a notification.

It said all sale and purchase transactions in government securities, where at least one of the parties is an FPI, will be settled only on T+2 basis.

All other trades not involving an FPI will continue to settle on T+1 basis, RBI said.

The guidelines shall come into effect from April 6, 2015, RBI added.

In its 4th Bi-Monthly Monetary Policy Statement, 2014-15 in September last, RBI Governor Raghuram Rajan had said that an extended time period will be provided to settle trades on government securities by FPIs and foreign investors.