Sebi offers a way over FPI tax rule hurdle
India's central bank is not looking to enable direct settlement of government securities via offshore settlement platforms like Euroclear -- one of the world's largest securities settlement systems -- despite recent tax changes aimed at attracting foreign investors, three sources familiar with the matter said. The Reserve Bank of India (RBI) wants overseas investors to participate directly on the domestic Negotiated Dealing System-Order Matching (NDS-OM) platform, an electronic system for secondary market trading in government bonds, the sources said. India has gradually opened up its bond markets to foreign investors over the last six years, by creating a pool of securities with no foreign investment limits and more recently by scrapping taxes on capital gains for overseas investors in these securities.
The Reserve Bank of India (RBI) has amended the rules on how Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other residents outside India can make investments, receive sale proceeds and how such transactions can be reported to the central bank. One of the major changes is that a person residing outside India (NRIs and OCIs) can now maintain a designated repatriable rupee account for investments made on a repatriable basis. These regulations, known as Foreign Exchange Management (Mode of Payment and Reporting of NonDebt Instruments) (Amendment) Regulations, 2026, came into force on June 13, 2026 .
The Reserve Bank has issued final amendment directions permitting commercial banks to lend to Real Estate Investment Trusts and InvITs, while retaining key prudential safeguards on exposure limits, asset quality, and repayment structures. The final directions were issued after incorporating feedback received from stakeholders on the draft norms. Major changes and conditions Among major changes, the Reserve Bank of India (RBI) said overseas branches of Indian banks may participate in Real Estate Investment Trusts (REITs) financing under syndication arrangements, subject to a 20 percent cap on contribution and a 150 percent risk weight.
The Reserve Bank of India (RBI) on Wednesday announced the launch of payment systems connectivity between India and Cambodia, allowing Indian travellers to make UPI-based QR code payments at merchants across the Southeast Asian nation. The facility, launched in Phnom Penh on Tuesday, marks the first phase of collaboration between NPCI International Payments Ltd (NIPL) and Acleda Bank Plc under the aegis of the RBI and the National Bank of Cambodia. Under the arrangement, Indian users can make real-time merchant payments at more than 4.5 million merchants enabled with Cambodia’s KHQR, the country’s national QR code standard, using UPI-enabled applications.
Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Monday said the capital markets regulator and the Reserve Bank of India (RBI) are jointly working on introducing derivatives on corporate bond indices as part of efforts to deepen India's corporate bond market. Addressing the ICICI Securities India Investor Conference 2026 in Mumbai, Pandey said the architecture of the corporate bond market has been significantly strengthened in recent years. "The Electronic Book Provider platform has been expanded to include issuances by REITs and InvITs, improving transparency and efficiency in the debt market," he said. In line with the Union Budget announcement, a working group is currently finalising operational details for a market-making framework aimed at improving liquidity in the corporate bond market. "Additionally, SEBI and RBI are working together to introduce derivatives on corporate bond indices," Pandey said.
The Reserve Bank of India (RBI) on Friday unanimously voted to keep the benchmark repo rate unchanged at 5.25 per cent, with the Monetary Policy Committee (MPC) retaining its neutral stance as policymakers weighed mounting inflation risks from elevated crude oil prices, a weakening rupee, and concerns over a below-normal monsoon against the need to support economic growth. The six-member MPC, chaired by RBI Governor Sanjay Malhotra, also left the Standing Deposit Facility (SDF) rate unchanged at 5 per cent and the Marginal Standing Facility (MSF) rate and Bank Rate at 5.5 per cent. The committee decided to continue with the neutral policy stance, signalling flexibility to respond to evolving inflation and growth dynamics.
Even though the rupee has approached a critical depreciation threshold, India is unlikely to reopen a special Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit window similar to the one introduced during the 2013 “taper tantrum”, as the country’s forex reserves remain strong and US dollar interest rates are now at record highs. During the 2013 “taper tantrum”, the US Federal Reserve’s benchmark interest rate was near 0.25%, as the Fed was still following an ultra-loose post-global financial crisis monetary policy. In contrast, the federal funds rate is currently around 4%, following an aggressive tightening cycle to combat inflation. US bond yields are also hovering around record highs of nearly 5%. Costly NRI deposits FCNR(B) deposit rates offered by public sector banks currently range between 5.5% and 6%. Any move to mobilise dollar deposits from NRIs would therefore be extremely costly for Indian banks and would likely require substantial subsidisation by the Reserve Bank of India (RBI).
