RBI excludes new securities in 14-year and 30-year tenor from ‘Fully Accessible Route’

Existing 14-year and 30-year government securities that are already available under the FAR will continue to be accessible by non-residents in the secondary market.

The Reserve Bank of India, in consultation with the Government has decided to exclude all new securities of 14-year and 30-year tenors from the Fully Accessible Route, effective immediately, a press statement on July 29 said.

"..future issuances of Government Securities in these tenors shall not be available for investment under the Fully Accessible Route", RBI said.

Existing 14-year and 30-year government securities that are already available under the FAR will continue to be accessible by non-residents in the secondary market.

Investments by Foreign Portfolio Investors in 14-year and 30-year tenor bonds shall now be under the investment limits prescribed by the Reserve Bank.

Moneycontrol had reported last year that the Centre and the banking regulator both were considering steps to mitigate any adverse consequences of potentially large and sudden outflows from India's bond market, once sovereign bonds become part of the JPMorgan global bond index.

Indian government bonds' entry into the JP Morgan Government Bond Index – Emerging Market marked a significant milestone that is expected to draw substantial global investment into India's debt market. This inclusion will give global investors greater access to the Indian economy and may prompt inflows of as much as $30 billion, according to HSBC Holdings Plc.