“The government sovereign green bonds issued in the fiscal year 2022-2023 that were eligible for investment under the FAR will be designated as specified securities. The directions have been issued under Section 45W of Chapter IIID of the RBI Act.”
— Reserve Bank of India notification
While designating sovereign green bonds (SGrBs) as specified securities under fully accessible route (FAR), the Reserve Bank of India (RBI) allowed non-residents to invest in these bonds through the same route without any cap, reported Moneylife.
In a notification, RBI said, “The government sovereign green bonds issued in the fiscal year 2022-2023 that were eligible for investment under the FAR will be designated as specified securities. The directions have been issued under Section 45W of Chapter IIID of the RBI Act.”
Earlier, the central bank had allowed non-residents to invest in sovereign green bonds through FAR. RBI is issuing SGrBs worth Rs8,000 crore on January 25 and February 9, 2023. RBI is planning to release SGrBs for an aggregate amount of Rs16,000 crore.
Foreign portfolio investors, non-resident Indians (NRIs), overseas citizens of India (OCIs), and other entities permitted to invest in government securities under the debt regulations can invest under FAR
In March 2020, RBI fully opened some specified categories of government securities for non-resident investors without any restrictions, apart from being available to domestic investors. RBI, in March 2020 and in July 2022 notified government securities that were eligible for investment under the FAR as specified securities.
It has now decided to include sovereign green bonds (SGrBs) in the specified securities category.
Fully accessible route-FAR was introduced by the government in consultation with RBI. To enable non-residents to invest in the specified government of India-dated securities, the Union government in consultation with RBI had, introduced FAR. Under the FAR, eligible investors can invest in specified government securities without any investment ceilings. There is no quantitative limit on investment for eligible investors in the specified securities.
Foreign portfolio investors, non-resident Indians (NRIs), overseas citizens of India (OCIs), and other entities permitted to invest in government securities under the debt regulations can invest under FAR.
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