In May 2025, Mumbai (Maharashtra)-based Reserve Bank of India (RBI) has relaxed norms for Foreign Portfolio Investors (FPIs) to buy local corporate bonds by removing “short-term debt investment limits” and the ‘concentration limits’, aimed at providing greater ease of investment to FPIs.
- As per RBI directions, all these new rules came into force with immediate effect.
Key Changes:
i.Under the previous framework, investments by FPIs in corporate bonds with maximum residual maturity period of 1 year was capped at 30% of the total investment of FPIs in corporate bonds. These limits were applicable on the end-of-day basis.
ii.Also, investment in corporate debt securities by an FPI (including its related FPIs) was limited at 15% of prevailing investment limit for long-term FPIs and 10% for others.
iii.Now, with the removal of these restrictions, FPIs will be able to hold a larger share of individual bond issues and invest freely across the maturity curve i.e. with less than one year to maturity.
Note: Despite these relaxations, the overall investment ceiling for FPIs in corporate bonds remains at Rs 8.2 lakh crore for the April–September period and Rs 8.8 lakh crore for the October–March period of the Financial Year(FY).
Important Terms:
i.The short-term investment limit means putting restriction on the portion of FPI investments in debt instruments that mature within 1 year.
ii.The ‘concentration limit’ restricts the extent to which an FPI could invest in the debt instruments of a single corporate issuer to mitigate the risk of overexposure.
RBI Mandated Reporting of Digital Lending Apps via CMS Portal
According to RBI’s (Digital Lending) Directions 2025, all Banks and other Regulated Entities (REs) are now required to report details of their Digital Lending Applications (DLAs) through Centralised Information Management System (CIMS) portal of RBI. These new directions aimed at regulating digital lending practices by REs.
- Also, these directions will help in consolidating and streamlining various existing regulatory instructions under a single regulatory framework to enhance transparency and control in a rapidly increasing digital lending industry.
- As per RBI’s circular, the portal will be operational for reporting from May 13, 2025 and also, REs are required to upload their initial data till June 15, 2025.
Key Points:
i.RBI has further clarified that the list of DLAs is being made available on the web portal for the limited purpose, which will help customers in verifying the claim of DLA’s association with an RE.
ii.The List of DLAs will be based on data submitted by RE through CIMS portal without any further validation check by the RBI and the list will be updated automatically.
iii.Some of the key measures that an RE is required to conduct before entering into an agreement with a Lending Service Provider (LSP) for digital lending like: assessing technical capabilities of LSP, robustness of data privacy policies and storage systems, among others.
- Also, if the LSP has agreements with various REs for digital lending, then it is mandatory for LSP to provide a digital view of all loan offers matching the borrower’s request on the DLAs.
Recent Related News:
In March 2025, RBI released India’s latest International Investment Position (IIP) data. As per IIP data, net claims of non-residents in India has increased by USD 11 billion, to USD 364.5 billion during the 3rd Quarter (Q3: October to December) of Financial Year 2024-25 (FY25).
- The data showed a decrease in foreign assets of Indian residents by USD 40.1 billion and also, the claims of non-residents’ in India decreased by USD 29.1 billion. This results in an increase in India’s total foreign liabilities.
