RBI/2024-25/126
FMRD.FMD.No.10/14.01.006/2024-25

January 07, 2025

All Authorised Persons

Madam/Sir,

Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025

In exercise of the powers conferred under section 6, read with section 47 of the Foreign Exchange Management Act, 1999, the Reserve Bank has issued the following regulations to regulate non-resident investment in debt instruments in India:

1. Foreign Exchange Management (Permissible Capital Accounts Transactions) Regulations, 2000 notified vide Notification No. FEMA 1/2000-RB dated May 03, 2000, as amended from time to time;

2. Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 notified vide Notification No. FEMA 3(R)/2018-RB dated December 17, 2018, as amended from time to time; and

3. Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified vide Notification No. FEMA. 396/2019-RB dated October 17, 2019, as amended from time to time.

2. The Reserve Bank has also been issuing necessary directions in the form of A.P. (DIR Series) Circulars under the aforesaid regulations as also directions under Section 45W of the Reserve Bank of India Act, 1934, at various times relating to non-resident investment in debt instruments in India. Such Directions issued through various circulars, as set out in Annex – 1 to these Directions, have been consolidated and issued in this Master Direction.

3. AD Category-I banks may bring the contents of the Master Direction to the notice of their constituents.

4. The Master Direction has been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and Section 45W of the Reserve Bank of India Act, 1934 and are without prejudice to permissions/ approvals, if any, required under any other law.

Yours faithfully,

(Dimple Bhandia)
Chief General Manager

FINANCIAL MARKETS REGULATION DEPARTMENT

Notification No. FMRD.FMD.11/14.01.006/2024-25 dated January 07, 2025

Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025

The Reserve Bank of India (hereinafter called the Reserve Bank) hereby issues the following Directions in exercise of the powers conferred under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 and under section 45W of the Reserve Bank of India (RBI) Act, 1934

1. Short title, commencement, and applicability of the Directions

(i) These Directions shall be called the Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025.

(ii) These Directions shall be applicable with immediate effect.

(iii) These Directions shall be applicable to all transactions by eligible non-residents in debt instruments.

Part – 1

2. Definitions

(i) In these Directions, unless the context otherwise requires:

(a) “Corporate debt securities” shall include all instruments specified in sub-paragraph – A of paragraph 1 of Schedule 1 to Foreign Exchange Management (Debt Instruments) Regulations, 2019, other than Government securities and municipal bonds as specified at clause (a) and clause (k) of that sub-paragraph, as amended from time to time.

(b) “Committed Portfolio Size” (CPS) for a Foreign Portfolio Investor (FPI) shall mean the amount allotted to that FPI under the Voluntary Retention Route.

(c) “Default bonds” shall mean Non-Convertible Debentures/bonds, which are under default, either fully or partly, in the repayment of principal on maturity or principal instalment in the case of amortising bond.

(d) “Electronic Trading Platform (ETP)” shall have the same meaning as assigned to it in Section 2(1)(iii) of the Electronic Trading Platforms (Reserve Bank) Directions, 2018 dated October 05, 2018, as modified from time to time;

(e) “Foreign Portfolio Investor (FPI)” shall mean a person registered in accordance with the provisions of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, as amended from time to time.

(f) “Government security” shall mean a security as defined under section 2(f) of the Government Securities Act, 2006.

(g) “Long-Term FPIs” shall mean Sovereign Wealth Funds, Multilateral Agencies, Pension / Insurance / Endowment Funds and foreign Central Banks.

(h) “Minor violations” shall mean violations that are, in the considered opinion of the custodians, unintentional, temporary in nature or have occurred on account of reasons beyond the control of FPIs, and in all cases are corrected on detection.

(i) “Multilateral Financial Institution”, for the purpose of these Directions, shall mean an FPI which is a Multilateral Financial Institution in which Government of India is a member.

(j) “Non-resident” shall mean a person resident outside India as defined under section 2(w) of FEMA, 1999.

(k) “Over-the-Counter (OTC) Markets” shall mean markets where transactions are undertaken in any manner other than on exchanges and shall include those executed on electronic trading platforms (ETPs).

(l) “Person resident outside India” shall have the same meaning as assigned to it under section 2(w) of FEMA, 1999.

(m) “Real Estate Business” shall have the same meaning as assigned to it under the note (6) to item no. 10.2 in the Table in Schedule – I to Foreign Exchange Management (Non-debt Instruments) Rules, 2019.

(n) “Recognised stock exchange” shall have the same meaning as assigned to it in section 2(f) of the Securities Contracts (Regulations) Act, 1956.

(o) “Related FPIs” shall mean ‘investor group’ as defined in Regulation 22(3) of Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019.

(p) “Repo” shall have the same meaning as assigned to it in Section 45U (c) of RBI Act, 1934; and for the purpose of these Directions excludes repo conducted under the Reserve Bank’s Liquidity Adjustment Facility.

(q) “Retention Period” shall mean the time period that an FPI voluntarily commits for retaining the CPS in India under the Voluntary Retention Route.

(r) “Reverse Repo” shall have the same meaning as assigned to it in Section 45U (d) of RBI Act, 1934; and for the purpose of these Directions excludes reverse repo conducted under the Reserve Bank’s Liquidity Adjustment Facility.

(s) “Short-term Investments” shall mean investments with residual maturity up to one year.

(t) “Specified securities” shall mean Central Government securities as periodically notified by the Reserve Bank for investment under the Fully Accessible Route.

(ii) Words and expressions used but not defined in these Directions, shall have the meaning assigned to them in FEMA, 1999, and the RBI Act, 1934.

3. Investment Channels

(i) The following shall be the channels for investment in debt instruments by non-residents:

1. General Route¹ for investment in Government securities and corporate debt securities by FPIs subject to specified investment limits and macro-prudential limits;

2. Voluntary Retention Route² for investments in Government securities and corporate debt securities, free of certain macro-prudential limits applicable to FPI investments in debt markets under the General Route, by FPIs that commit to remain invested for a stipulated retention period;

3. Fully Accessible Route³ for investments by non-residents in certain specified categories of Central Government securities (‘specified securities’) without any restriction; and

4. Scheme for Trading and Settlement of Sovereign Green Bonds issued by the Central Government by eligible foreign investors in the International Financial Services Centre (IFSC).

Part – 2

4. General Route

4.1. Eligible non-residents: Foreign Portfolio Investors

4.2. Eligible instruments and investment limits

Note:

(a) The corresponding absolute values of the investment limits shall be notified by the Reserve Bank for each financial year.

(b) Investments in municipal bonds shall be reckoned under the investment limit for State Government securities.

4.3. Investment in Government securities shall be in terms of the following:

(i) Minimum residual maturity requirement: An FPI may invest in Central Government securities (including Treasury Bills) and State Government securities without any minimum residual maturity requirement.

(ii) Short-term investment limit: Investments by an FPI in Central Government securities (including Treasury Bills) and State Government securities with residual maturity up to one year shall not exceed 30 per cent of the total investment of the FPI in each category. The short-term investment limit shall apply on investments on an end-of-day basis.

Provided that the limit shall not apply:

1. If the short-term investments of an FPI consist entirely of investments made on or before April 27, 2018; and

2. To investments by an FPI made between July 08, 2022 and October 31, 2022 (both dates included).

(iii) Security-wise limit: FPI investment, in aggregate, in any Central Government security shall not exceed 30 per cent of the outstanding stock of the security.

(iv) Concentration limit: Investment in Central Government securities and State Government securities by an FPI (including its related FPIs) shall not exceed 15 per cent of prevailing investment limit for each category in case of long-term FPIs and 10 per cent of prevailing investment limit for other FPIs.

(v) Reinvestment of coupons and proceeds of sale / redemption:

(a) Reinvestment of coupon by FPIs in Central Government securities and State Government securities shall be reckoned within the limit for investment stipulated for Central Government securities and State Government securities, as applicable. FPIs may, however, reinvest coupons without any constraint. Such reinvestments will be added to the amount of utilisation at the time of periodic re-setting of limits.

(b) FPIs may reinvest the proceeds of any sale/redemption of Central Government securities and State Government securities within two working days from the date of sale/redemption (including the date of sale/redemption) irrespective of the availability of limits in the category. Any reinvestment beyond two working days shall be subject to availability of limits for that category.

(vi) The Clearing Corporation of India Ltd. (CCIL) shall monitor the utilisation of the investment limits for FPI investment in Central Government securities and State Government securities as well as the security-wise limit for investment in Central Government securities. CCIL shall disseminate the utilisation levels of the aforesaid limits.

(vii) The primary responsibility of complying with all applicable limits for investment in Government securities shall lie with the FPIs and custodians.

4.4. Investment in corporate debt securities shall be in terms of the following:

(i) Minimum residual maturity requirement: An FPI may invest only in corporate debt securities with original/residual maturity of above one year.

(ii) An FPI shall not invest in:

1. corporate debt securities with any optionality clause that is exercisable within a year from the date of investment;

2. debt mutual fund schemes with maturity or Macaulay duration of the portfolio less than one year⁴;

3. partly paid debt instruments; and

4. amortised corporate debt instruments where the duration of the instrument is up to one year.

(iii) Short-term investment limit: Investments by an FPI in corporate debt securities with residual maturity up to one year shall not exceed 30 per cent of the total investment of the FPI in corporate debt securities. The short-term investment limit shall apply on investments on an end-of-day basis.

Provided that the limit shall not apply:

1. If the short-term investments of an FPI consist entirely of investments made on or before April 27, 2018; and

2. To investments by FPIs made between July 08, 2022, and October 31, 2022 (both dates included).

(iv) Issue-wise limit: Investment by any FPI, including investments by related FPIs, shall not exceed 50 per cent of any issue of a corporate debt security. In case an FPI, including related FPIs, had invested in more than 50 per cent of any single issue before this stipulation came into effect, vide A.P. (DIR Series) Circular No. 31 dated June 15, 2018, the FPIs shall not make further investments in that issue until this limit is complied with.

(v) Concentration limit: Investment in corporate debt securities by an FPI (including its related FPIs) shall not exceed 15 per cent of prevailing investment limit for these securities in case of long-term FPIs and 10 per cent of prevailing investment limit for other FPIs.

(vi) FPI investment in unlisted corporate debt securities in the form of non-convertible debentures/bonds issued by public or private companies shall be subject to end-use restrictions on investments in real estate business, capital market and purchase of land.

(vii) An FPI may invest in ‘to be listed’ corporate debt securities. If the corporate debt security is not listed within such period prescribed by Securities and Exchange Board of India (SEBI) for the purpose, the FPI shall immediately sell the corporate debt security to the issuer or to a third party. For this purpose, the terms of offer to an FPI investing in such securities shall contain a clause requiring the issuer to immediately redeem/buyback the corporate debt security in such an eventuality.

(viii) Exemptions

(a) The minimum residual maturity requirement, short-term investment limit and the issue-wise limit shall not apply to investments by FPIs in the following securities:

1. Security Receipts and debt instruments issued by Asset Reconstruction Companies;

2. Debt instruments issued by an entity under the Corporate Insolvency Resolution Process as per a resolution plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016; and

3. Default bonds.

(b) The minimum residual maturity requirement shall not apply to investments by FPIs in the following securities:

1. Any certificate or instrument issued by a special purpose vehicle (SPV) set up for securitisation of asset/s where banks, Financial Institutions or Non Banking Financial Companies are originators; and/or

2. Any certificate or instrument issued and listed in terms of the Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008, as amended from time to time.

(c) The issue-wise limit shall not apply to investments in corporate debt securities by multilateral financial institutions.

(ix) An FPI which proposes to acquire default bonds shall disclose to the Debenture Trustees the terms of its offer to the existing debenture holders / beneficial owners from whom it is acquiring the bonds.

(x) Utilization of FPI investment limits in corporate debt securities shall be monitored by the depositories registered with SEBI in accordance with the applicable regulations/directions/guidelines issued by SEBI from time to time.

(xi) The primary responsibility of complying with all applicable limits for investment in corporate debt securities shall lie with the FPIs and custodians.

Part – 3

5. Voluntary Retention Route (VRR)

5.1. Eligible investors: Foreign Portfolio Investors

5.2. Eligible instruments:

(i) Any instrument listed under Schedule 1 to Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified, vide, Notification No. FEMA. 396/2019-RB dated October 17, 2019, other than units of domestic mutual funds or Exchange Traded Funds (ETFs) which invest less than or equal to 50 per cent in equity, as specified at 1A(d) of that schedule, and partly paid debt instruments. However, investments shall be permitted in ETFs that invest only in debt instruments.

(ii) Repos and reverse repos, subject to the amount borrowed or lent under repo not exceeding 10 per cent of the investments by an FPI under VRR.

Provided that:

(a) FPI investment in unlisted corporate debt securities in the form of non-convertible debentures/bonds issued by public or private companies shall be subject to end-use restriction on investment in real estate business, capital market and purchase of land.

(b) An FPI may invest in ‘to be listed’ corporate debt securities. If the corporate debt security is not listed within such period prescribed by SEBI for the purpose, the FPI shall immediately sell the corporate debt security to the issuer or to a third party. For this purpose, the terms of offer to an FPI investing in such securities shall contain a clause requiring the issuer to immediately redeem/buyback the corporate debt security in such an eventuality.

(c) An FPI which proposes to acquire default bonds shall disclose to the Debenture Trustees the terms of its offer to the existing debenture holders / beneficial owners from whom it is acquiring the bonds.

5.3. Investment limit: ₹2,50,000 crore⁵ or higher, as may be notified by the Reserve Bank. The investment limit may be released in one or more tranches.

(i) Allocation of investment limit

(a) Allocation of investment amount to FPIs under this Route shall be made on tap and allotted on a ‘first come, first served’ basis or through an auction mechanism as detailed in Annex – 2. The mode of allotment shall be announced by the Reserve Bank for each tranche.

(b) For allocation of investment amounts on tap, an FPI may apply for investment limit online to CCIL through their respective custodians.

(c) The maximum investment limit which can be allotted to an FPI (including its related FPIs) shall be 50 per cent of the amount offered for each allotment by tap or through auction, in case of demand for more than 100 per cent of amount offered.

(ii) Retention period: The minimum retention period shall be three years or as announced by the Reserve Bank for each tranche. The retention period shall commence from the date of allotment of limit.

Provided that for an FPI that has availed additional time to invest in terms of the A.P.(DIR Series) Circular No.32 dated May 22, 2020, the retention period for the investments (committed by it at the time of allotment of investment limit) would be reset to commence from the date that the FPI invests 75 per cent of the Committed Portfolio Size (CPS).

5.4. Investments under the VRR

(i) An FPI shall invest at least 75 per cent of its CPS within three months from the date of allotment and remain invested to a minimum extent of 75 per cent of the CPS at all times during the committed retention period. For this purpose, investment shall include cash holdings in the Rupee accounts used for the VRR. The required investment amount shall be adhered to on an end-of-day basis.

(ii) An FPI may, at its discretion, transfer its investments made under the General Route, if any, to the VRR.

(iii) Custodians shall not permit any repatriation from the cash accounts of an FPI, if such transaction leads to the FPI’s assets falling below the minimum stipulated level of 75 per cent of CPS during the retention period.

(iv) Income from investments through the VRR may be reinvested at the discretion of the FPI even if such investments are in excess of the CPS.

(v) Investments made through the VRR shall not be subject to any minimum residual maturity requirement including the short-term limit, concentration limit or issue-wise limits applicable to corporate debt securities as specified for FPI investment under the General Route.

5.5. Exit provisions:

(i) An FPI may, at the end of the retention period, opt to:

1. liquidate its portfolio and exit; or

2. shift its investments to the General Route, subject to availability of limit under the General Route; or

3. continue to hold its investments until maturity or sale, whichever is earlier; or

4. continue the investments for an additional identical retention period. In such a case, the FPI shall convey this decision to its custodian before the end of the committed retention period. The custodian, in turn, shall report the same to CCIL.

(ii) An FPI desiring to exit its investments, fully or partly, under the VRR prior to the end of the retention period may do so by selling its investments to another FPI or FPIs. The FPI (or FPIs) buying such investment shall abide by all the terms and conditions applicable to the selling FPI under the VRR.

5.6. An FPI shall open one or more separate Special Non-Resident Rupee (SNRR) account(s) for investments through the VRR. All fund flows relating to investment through the VRR shall be reflected in such account(s). An FPI may open a separate security account for holding debt securities under the VRR.

5.7. Utilisation of limits and adherence to other requirements of the VRR shall be the responsibility of both the FPI and its custodian. Custodians shall ensure that appropriate legal documentation with FPIs are in place to enable the custodians to ensure that the Directions under the VRR are adhered to.

Part – 4

6. Fully Accessible Route

6.1. Eligible investors:

(i) Foreign Portfolio Investors, Non-Resident Indians and Overseas Citizens of India.

(ii) Any other person resident outside India, as may be notified by the Reserve Bank from time to time.

6.2. Eligible instruments (‘specified securities’):

(i) All securities included under the FAR on the date of issuance of these Directions (as set out in Annex – 3); all new issuances of 5-year, 7-year and 10-year tenors by the Central Government; and any other security that the Reserve Bank may notify in this regard.

(ii) The Reserve Bank may add new tenors or change the tenors of new securities to be designated as ‘specified securities’ from time to time.

(iii) ‘Specified securities’, once so designated, shall remain eligible for investment under the FAR until maturity.

6.3. FPI investment in “specified securities” under this Route shall not be subject to any investment limit or macro-prudential controls as applicable for investments in Government securities through the General Route.

Part – 5

7. Investments in Sovereign Green Bonds issued by the Government of India may be made by eligible investors in the International Financial Services Centre in India. Such investment shall be in terms of the ‘Scheme for Trading and Settlement of Sovereign Green Bonds in the International Financial Services Centre in India’, notified by the Reserve Bank, vide CO.FMRD.FMIA.No.S242/11-01-051/2024-2025 dated August 29, 2024, as amended from time to time.

Part – 6

8. Other Facilities

A non-resident may undertake transactions in foreign exchange, interest rate and credit derivatives in terms of the following Directions:

1. Master Direction – Risk Management and Inter-Bank Dealings issued vide A.P. (DIR Series) Circular No. dated July 05, 2016, as amended from time to time;

2. Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2019 issued vide FMRD.DIRD.19/14.03.046/2018-19 dated June 26, 2019, as amended from time to time; and

3. Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022, issued vide FMRD.DIRD.10/14.03.004/2021-22 dated February 10, 2022, as amended from time to time, read with A.P. (DIR Series) Circular No. 23 dated February 10, 2022 on Transactions in Credit Default Swap (CDS) by Foreign Portfolio Investors – Operational Instructions, as amended from time to time.

9. FPI investment in Government securities in OTC Markets

(i) An FPI may participate in the Government securities market, both primary and secondary.

(ii) An FPI may trade in the secondary market for Government securities through the primary members of NDS-OM, including by using the NDS-OM Web module.

(iii) Payment of margin for transaction in Government securities: AD Cat-I Banks may lend to FPIs in accordance with their credit risk management frameworks for the purpose of placing margins with CCIL for the settlement of Government securities transactions by FPIs.

(iv) Reporting of transactions in Government securities: All OTC trades in Government securities undertaken by FPIs (except transactions undertaken using the NDS-OM web module) shall be reported to the NDS-OM platform on the trade date within three hours after the close of trading hours for the Government securities market and in accordance with the operational guidance issued by Clearcorp Dealing Systems (India) Ltd in this regard.

Note:

(a) Information about trades undertaken by domestic counterparties with FPIs shall be disseminated by the Clearcorp Dealing Systems (India) Ltd. after one leg of the trade is reported on the NDS-OM platform by the domestic counterparty with a suitable qualifier to indicate that the trade is awaiting counterparty confirmation.

(b) Domestic market participants, including domestic counterparties to transactions with FPIs, shall continue to report transactions to the NDS-OM platform as per extant practice.

(v) Settlement of transaction in Government securities: OTC secondary market transactions in Government securities undertaken by FPIs may be settled on T+1 or on T+2 basis. However, transactions undertaken through the NDS-OM web module shall be settled only on a T+1 basis.

10. Amounts of investment in Central Government securities (including Treasury Bills), State Government securities and corporate debt securities shall be reckoned in terms of the face value of securities.

Part – 7

11. Obligation to provide information sought by the Reserve Bank

The Reserve Bank may call for information or statement or seek any clarification, which in the opinion of the Reserve Bank is relevant, from non-residents, custodians, or any other entity involved with non-resident investment in debt instruments. Such persons, agencies and participants shall furnish such information, statement or clarification within such time, and in the manner, as specified by the Reserve Bank, from time to time.

12. Dissemination of data

The Reserve Bank or any other person authorised by the Reserve Bank, may publish any anonymised data related to transactions by non-residents in debt instruments.

13. Violation of Directions

(i) Any transaction in breach of applicable investment limit or macro-prudential control shall not be accepted. Any transaction/investment in breach of applicable investment limit shall need to be reversed.

(ii) Any violation by FPIs shall be subject to regulatory action as determined by SEBI. FPIs are permitted, with the approval of the custodian, to regularize minor violations immediately upon notice, and in any case, within five working days of the violation. Custodians shall report to SEBI all non-minor violations as well as minor violations that have not been regularised.

14. Investments by eligible investors under these Directions shall be governed by all other applicable provisions of FEMA, 1999, and the rules, regulations and directions issued thereunder by the Reserve Bank from time to time, unless otherwise specified.

Yours faithfully,

(Dimple Bhandia)
Chief General Manager

Annex – 1

List of circulars that are consolidated

1. A.P. (DIR Series) Circular No. 25 dated October 17, 2008

2. A.P. (DIR Series) Circular No. 55 dated April 29, 2011

3. A.P. (DIR Series) Circular No. 42 dated November 03, 2011

4. A.P. (DIR Series) Circular No. 89 dated March 01, 2012

5. A.P. (DIR Series) Circular No. 135 dated June 25, 2012

6. A.P. (DIR Series) Circular No. 7 dated July 16, 2012

7. A.P. (DIR Series) Circular No. 21 dated August 31, 2012

8. A.P. (DIR Series) Circular No. 45 dated October 22, 2012

9. A.P. (DIR Series) Circular No. 80 dated January 24, 2013

10. A.P. (DIR Series) Circular No. 111 dated June 12, 2013

11. A.P. (DIR Series) Circular No. 99 dated January 29, 2014

12. A.P. (DIR Series) Circular No. 104 dated February 14, 2014

13. A.P. (DIR Series) Circular No. 118 dated April 07, 2014

14. A.P. (DIR Series) Circular No. 13 dated July 23, 2014

15. A.P. (DIR Series) Circular No. 22 dated August 28, 2014

16. A.P. (DIR Series) Circular No. 71 dated February 03, 2015

17. A.P. (DIR Series) Circular No. 72 dated February 05, 2015

18. A.P. (DIR Series) Circular No. 73 dated February 06, 2015

19. FMRD.DIRD.06/14.03.007/2014-15 dated March 20, 2015

20. A.P. (DIR Series) Circular No. 6 dated July 16, 2015

21. A.P. (DIR Series) Circular No. 19 dated October 6, 2015

22. A.P. (DIR Series) Circular No. 31 dated November 26, 2015

23. A.P. (DIR Series) Circular No. 55 dated March 29, 2016

24. A.P. (DIR Series) Circular No. 4 dated September 30, 2016

25. FMRD.DIRD. 08/14.03.007/2016-17 dated October 20, 2016

26. A.P. (DIR Series) Circular No. 19 dated November 17, 2016

27. A.P. (DIR Series) Circular No. 23 dated December 27, 2016

28. A.P. (DIR Series) Circular No. 43 dated March 31, 2017

29. A.P. (DIR Series) Circular No. 1 dated July 03, 2017

30. A.P. (DIR Series) Circular No. 7 dated September 28, 2017

31. FMRD.DIRD.05/14.03.007/2017-18 dated November 16, 2017

32. A.P. (DIR Series) Circular No. 14 dated December 12, 2017

33. A.P. (DIR Series) Circular No. 22 dated April 06, 2018

34. A.P. (DIR Series) Circular No. 24 dated April 27, 2018

35. A.P. (DIR Series) Circular No. 26 dated May 01, 2018

36. A.P. (DIR Series) Circular No. 31 dated June 15, 2018

37. A.P. (DIR Series) Circular No. 19 dated February 15, 2019

38. A.P. (DIR Series) Circular No. 21 dated March 01, 2019

39. A.P. (DIR Series) Circular No. 22 dated March 01, 2019

40. A.P. (DIR Series) Circular No. 26 dated March 27, 2019

41. A.P. (DIR Series) Circular No. 33 dated April 25, 2019

42. A.P. (DIR Series) Circular No. 34 dated May 24, 2019

43. A.P. (DIR Series) Circular No. 18 dated January 23, 2020

44. A.P. (DIR Series) Circular No. 19 dated January 23, 2020

45. A.P. (DIR Series) Circular No. 24 dated March 30, 2020

46. A.P. (DIR Series) Circular No. 25 dated March 30, 2020

47. FMRD.FMSD.No.25/14.01.006/2019-20 dated March 30, 2020

48. A.P. (DIR Series) Circular No. 30 dated April 15, 2020

49. A.P. (DIR Series) Circular No. 32 dated May 22, 2020

50. A.P. (DIR Series) Circular No. 12 dated February 26, 2021

51. A.P. (DIR Series) Circular No. 14 dated March 31, 2021

52. A.P. (DIR Series) Circular No.05 dated May 31, 2021

53. A.P. (DIR Series) Circular No.06 dated June 4, 2021

54. FMRD.FMID.No.05/14.01.006/2021-22 dated June 7, 2021

55. A.P. (DIR Series) Circular No.16 dated November 08, 2021

56. A.P. (DIR Series) Circular No.22 dated February 10, 2022

57. A.P. (DIR Series) Circular No. 01 dated April 19, 2022

58. FMRD.FMID.No.04/14.01.006/2022-23 dated July 07, 2022

59. A.P. (DIR Series) Circular No.07 dated July 07, 2022

60. FMRD.FMID.No.07/14.01.006/2022-23 dated January 23, 2023

61. FMRD.FMID.No. 04/14.01.006/2023-24 dated November 08, 2023

62. FMRD.FMID.No.03/14.01.006/2024-25 dated July 29, 2024

63. FMRD.FMD.No.06/14.01.006/2024-25 dated November 07, 2024

Annex – 2

Auction process for allocation of investment amount under VRR

The auction process for allotment of investment amounts under the VRR shall be as under:

a. An FPI shall bid two variables - the amount it proposes to invest and the retention period of that investment, which shall not be less than the minimum retention period applicable for that auction.

b. An FPI is permitted to place multiple bids.

c. The criterion for allocation under each auction shall be the retention period bid in the auction.

d. Bids will be accepted in descending order of retention period, the highest first, until the amounts of accepted bids add up to the auction amount.

e. Allotment at margin (i.e., at the lowest retention period accepted), in case the amount bid at margin is more than the amount available for allotment, shall be as below:

1. The marginal bid shall be allocated partially such that the total acceptance amount matches the auction amount.

2. In case there are more than one marginal bids, allocation shall be made to the bid with the largest amount, and then in descending order of amount bid until the acceptance amount matches the auction amount.

3. In case the amount offered is the same for two or more marginal bids, the amount will be allocated equally.

f. If an FPI has been allotted multiple bids in an auction, the CPS shall be reckoned for each bid separately.

g. An FPI which has got CPS allocated under an auction will be eligible to participate in subsequent auction as well.

Annex – 3

¹ Introduced vide A.P. (DIR Series) Circular No 19 dated October 6, 2015 and as amended from time to time.

² Introduced vide A.P. (DIR Series) Circular No. 21 dated March 01, 2019, as amended from time to time.

³ Introduced vide A.P. (DIR Series) Circular No. 25 dated March 30, 2020, as amended from time to time.

⁴ The categorization of debt mutual fund schemes and meaning of the expression ‘Macaulay duration of the portfolio’ shall be as per the SEBI’s Master Circular for Mutual Funds dated June 27, 2024, as amended from time to time.

⁵ Any investment limit allotted under VRR-Govt. or VRR-Corp. in terms of the Directions issued under A.P. (DIR Series) Circular No. 21 dated March 01, 2019 shall be deemed as investment limit under the overall limit in terms of para 5.3 of the Directions.