Reserve Bank of India removes FPI limits on government securities under the General Route
AD Category‑I banks must process General Route FPI investments under the revised single limits without applying the removed short‑term, security‑wise or concentration caps.
Change
On 5 June 2026, the Reserve Bank of India withdrew the short-term, security-wise and concentration limits and merged the 'general' and 'long-term' sub-categories into single investment limits for Foreign Portfolio Investor (FPI) investments in Central and State Government securities under the General Route, expanded the Fully Accessible Route to longer tenors and Sovereign Green Bonds, and brought the directions into effect immediately.
Why it matters
FPIs can now hold Government securities under the General Route without the prior short-term, security-wise and concentration ceilings and without a minimum residual-maturity requirement, changing the compliance and allocation boundaries for onshore holdings. The Fully Accessible Route is widened to 15/30/40-year Central Government issuances and a broader Sovereign Green Bond tenor set. CCIL monitors utilisation against the revised single limits, and AD Category-I banks must apply the new framework immediately.
Implications
- — AD Category‑I banks' treasury and compliance teams must reconfigure onboarding, limit‑checking and reporting systems to stop enforcing short‑term, security‑wise and concentration caps for General Route FPI investments and to apply the new single FY2026‑27 limits — continuing to enforce the removed caps will produce mismatches with RBI limits.
- — Clearing Corporation of India Ltd. (CCIL) monitoring teams must monitor utilisation against the revised single investment limits for Central and State Government securities as the designated surveillance authority.
- — FPI compliance and portfolio teams operating General Route mandates must remove internal blocks tied to minimum residual maturity and the short‑term, security‑wise and concentration limits, and align position‑keeping and allocation to the revised single FY2026‑27 limits to avoid incorrect rejection or reporting of trades.
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