Qualified Foreign Investors can invest up to $1 billion in debts without lock-in period: RBI

NEW DELHI: In order to attract foreign funds, the Reserve Bank today allowed individual overseas investors also called Qualified Foreign Investors (QFIs) to invest up to $ 1 billion in corporate bond market and debt schemes of mutual funds without any lock-in period.

"QFIs are permitted to invest in corporate debt securities (without any lock-in or residual maturity clause) and Mutual Fund debt schemes subject to a total overall ceiling of $ 1 billion. This limit shall be over and above $ 20 billion for FII investment in corporate debt," RBI said in a notification.

As of now, foreign investors were allowed to invest $ 20 billion in the country's corporate bond market. With this the ceiling will increase to $ 21 billion.

A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs do not include FIIs/sub accounts.

Between January-May 2012, FIIs have put in $ 11.89 billion into Indian markets.

The government also expanded the ambit of QFIs to include residents of FATF member countries and those from countries which are signatories to International Organisation on Securities Commission protocol.