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RBI permits to invest in corporate debt instruments through Special Rupee Vostro Account (SRVA)
The Reserve Bank of India (RBI) amended the Foreign Exchange Management (Debt Instruments) Regulations, 2019 vide the Foreign Exchange Management (Debt Instruments) (Fourth Amendment) Regulations, 2025, expanding investment options for certain non-resident investors.
Through these amendments, RBI expanded the scope of permissible investments for SRVA holders—accounts opened by overseas banks—by allowing investment in corporate debt instruments.
The key highlights have been provided below:
- Expanded investment options: SRVA holders can now invest surplus rupee balances in non-convertible debentures, bonds, and commercial papers issued by Indian companies, in addition to existing eligibility for Central Government Securities.
- Regulatory treatment: These investments will be reckoned under the corporate debt limits applicable to Foreign Portfolio Investors (FPIs) under the General Route. Minimum residual maturity and issue-wise limits shall not apply to SRVA investments.
- Operational requirements: AD banks are required to facilitate opening of separate demat accounts for SRVA holders. All transactions must be reported to Securities and Exchange Board of India (SEBI)-registered depositories.
These changes are effective immediately and incorporated in the Master Direction – RBI (Non-resident Investment in Debt Instruments) Directions, 2025.
Source: A.P. (DIR Series) Circular No. 13 dated 3 October 2025 and Notification No. FEMA.396(4)/2025-RB dated 29 September 2025 (Published in Official Gazette on 30 September 2025)