RBI opens new route for FII investment in Indian stocks
30 Apr 2011
The Reserve Bank of India (RBI) has allowed custodian banks of foreign financial institutions and mutual funds to issue irrevocable payment commitments (IPCs) in favour of stock exchanges / clearing corporations of stock exchanges, on behalf of their FII and MF clients, for purchase of shares under the PIS, subject to RBI regulations.
Issue of such IPCs should be in accordance with the RBI regulations on banks' exposure to the capital market issued by the RBI from time to time.
RBI said it would issue necessary amendments to the Foreign Exchange Management (Guarantee) Regulations, 2000, separately.
This will allow FIIs and mutual funds registered with the Securities Exchange Board of India (SEBI) purchase shares or convertible debentures of an Indian company under the portfolio investment scheme (PIS).
