**Executive Summary**
This circular, issued by the Reserve Bank of India on October 03, 2025, amends existing regulations to allow persons resident outside India, holding Special Rupee Vostro Accounts (SRVA), to invest in non-convertible debentures/bonds and commercial papers issued by Indian companies. These investments will be reckoned under the investment limit for corporate debt securities under the General Route. The instructions outlined are effective immediately.
**Key Points / Main Content**
* **Investment Scope Expansion:** SRVA holders can now invest in non-convertible debentures/bonds and commercial papers issued by Indian companies.
* **Master Direction Updates:**
* Paragraph 3 (i) (e) of Part-1: "Government Securities" is replaced with "eligible instruments."
* Paragraph 4.2 of Part-2: Investments in the new instruments will be reckoned under the investment limit for corporate debt securities under the General Route.
* Paragraph 7A.2 of Part-5A: References to "Treasury Bills" now include "non-convertible debentures/bonds and commercial papers issued by an Indian company."
* Part-5A: Explanation added defining "non-convertible debentures/bonds issued by an Indian company" and "commercial papers issued by an Indian company" referencing specific paragraphs in Schedule 1 of the Foreign Exchange Management (Debt Instruments) Regulations, 2019.
* Part-5A: A new paragraph 7A.4.1 is inserted, stating that investments in non-convertible debentures/bonds and commercial papers issued by an Indian company shall be subject to the investment limit and stipulations specified for FPI investments under the General Route; the minimum residual maturity and issue-wise limit as set out in paragraphs 4.4 (i) and 4.4 (iv) of these Directions shall not apply to investments made under the SRVA route.
* Paragraph 7A.5 of Part-5A: "Central Government securities (including Treasury Bills)" is replaced with "eligible instruments."
* Part-5A: Paragraph (i-a) is inserted, mandating the facilitation of separate demat accounts for SRVA holders to hold all investments in non-convertible debentures/bonds and commercial papers issued by an Indian company.
* Part-5A: Paragraph (iii-a) is inserted, mandating the reporting of transactions by SRVA holders in non-convertible debentures/bonds and commercial papers issued by an Indian company to depository(ies) registered with SEBI, for reckoning them under the investment limits for corporate debt securities under the General Route.
* Paragraph 7A.6 (v) of Part-5A: "Central Government securities (including Treasury Bills)" is replaced with "eligible instruments."
* **Compliance Responsibility:** SRVA holders and AD Category-I banks maintaining these accounts are responsible for complying with applicable investment limits.
**Impact Analysis**
**SRVA Holders**
* **Impact**: SRVA holders now have expanded investment options, including non-convertible debentures/bonds and commercial papers issued by Indian companies.
* **Action Required**: SRVA holders must comply with the applicable investment limits and ensure all transactions are conducted through appropriate demat accounts.
**Authorised Dealer (AD) Category-I Banks**
* **Impact**: Banks are required to implement the changes and facilitate investment in the new instruments for SRVA holders.
* **Action Required**: Banks must:
* Facilitate the opening of separate demat accounts for SRVA holders.
* Report the transactions by SRVA holders in non-convertible debentures/bonds and commercial papers issued by an Indian company to depository(ies) registered with SEBI.
* Bring the contents of this circular to the notice of their constituents and customers concerned.
Key Entities Referenced
Foreign Exchange Management Act, 1999: The act under which the directions in the circular are issued.
Special Rupee Vostro Account (SRVA): A specific type of account used for international trade settlement in Indian Rupees, impacted by investment changes.
Foreign Exchange Management (Debt Instruments) Regulations, 2019: Regulations governing debt instruments, amended by the circular.
A.P. (DIR Series) Circular No. 10 dated July 11, 2022: Previous circular permitting investment of SRVA balances in Government Securities
Reserve Bank of India: The issuing regulatory authority for the circular.
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2025-26/90
A.P. (DIR Series) Circular No. 13 October 03, 2025
To,
All Authorised Dealer Category-I banks
Madam / Sir
Investment in Corporate Debt Securities by Persons Resident Outside India
through Special Rupee Vostro account
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule
1 to the Foreign Exchange Management (Debt Instruments) Regulations, 2019
notified, vide Notification No. FEMA. 396/2019-RB dated October 17, 2019, and the
Foreign Exchange Management (Deposit) Regulations, 2016 notified, vide Notification
No. FEMA. 5(R)/2016-RB dated April 01, 2016 as amended from time to time and the
relevant Directions issued thereunder. A reference is also invited to the Master
Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments)
Directions, 2025 dated January 07, 2025 (hereinafter “Master Direction”).
2. Persons resident outside India that maintain a Special Rupee Vostro Account
(SRVA) for international trade settlement in Indian Rupees in terms of A.P. (DIR
Series) Circular No. 10 dated July 11, 2022 were permitted to invest their rupee surplus
balance in the aforesaid account in Central Government Securities (including Treasury
Bills), vide A.P.(DIR Series) Circular no. 9 dated August 12, 2025. It has now been
decided to also permit investment of these balances in non-convertible
debentures/bonds and commercial papers issued by an Indian company.
3. The Master Direction has been updated as under:
(a) In paragraph 3 (i) (e) of Part-1, the words “Government Securities” shall
be replaced by the words, namely: - “eligible instruments”
वित्तीय बाज़ार विवियमि विभाग,केंद्रीय कायाालय भिि, िौिी ींमींविल, शहीद भगत व ींह मागा, फोर्ा, म ींबई–400001.भारत
फोि: (91-22) 2260 1000, ई-मेल: cgmfmrd@rbi.org.in
Financial Markets Regulation Department, Central Office Building, 9th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001. India
Tel: (91-22) 2260 1000, e-mail- cgmfmrd@rbi.org.in
वहन्दी आ ाि है, इ का प्रयोग बढ़ाइए(b) In paragraph 4.2 of Part-2, under the section ‘Note’, after the existing
paragraph (c), the following paragraph, shall be inserted, namely: -
“(d) Investments of rupee surplus balances in Special Rupee Vostro
Account in non-convertible debentures/bonds and commercial papers
issued by an Indian company shall be reckoned under the investment limit
for corporate debt securities under the General Route.
(c) In paragraph 7A.2 of Part-5A, after the words “(including Treasury Bills)”,
the following words shall be inserted, namely: -
“and non-convertible debentures/bonds and commercial papers issued by
an Indian company”
(d) In Part-5A, after the existing paragraph 7A.2, the following paragraph shall
be inserted, namely: -
“Explanation: “non-convertible debentures/bonds issued by an Indian
company” and “commercial papers issued by an Indian company” shall
mean instruments as specified respectively at paragraph 1A(b) and
paragraph 1A(c) of Schedule 1 to Foreign Exchange Management (Debt
Instruments) Regulations, 2019 notified, vide, Notification No. FEMA.
396/2019-RB dated October 17, 2019.”
(e) In Part-5A, after the existing paragraph 7A.4, the following paragraph shall
be inserted, namely: -
“7A.4.1 Investments in non-convertible debentures/bonds and commercial
papers issued by an Indian company shall be in terms of the following:
(i) The investments shall be subject to the investment limit and
stipulations specified for FPI investments under the General Route
as set out in paragraphs 4.2 and 4.4 of these Directions respectively.
Provided that the minimum residual maturity requirement as set out
in paragraph 4.4 (i) and the issue-wise limit as set out in paragraph
4.4 (iv) of these Directions shall not apply to investments made under
the SRVA route.
2(ii) The primary responsibility of complying with all applicable limits for
such investments shall lie with the SRVA holders and the AD
Category – I banks where these accounts are maintained.”
(f) In paragraph 7A.5 of Part-5A, the words “Central Government securities
(including Treasury Bills)” shall be replaced by the words, namely: - “eligible
instruments”
(g) In Part-5A, after the existing paragraph 7A.6.(i), the following paragraph
shall be inserted, namely: -
“(i-a) facilitate opening of separate demat accounts for SRVA holders for
holding all their investments in non-convertible debentures/bonds and
commercial papers issued by an Indian company”
(h) In Part-5A, after the existing paragraph 7A.6.(iii), the following paragraph
shall be inserted, namely: -
“(iii-a) report the transactions by SRVA holders in non-convertible
debentures/bonds and commercial papers issued by an Indian company to
depository(ies) registered with SEBI, for reckoning them under the
investment limits for corporate debt securities under the General Route”
(i) In paragraph 7A.6 (v) of Part-5A, the words “Central Government
securities (including Treasury Bills)” shall be replaced by the words, namely:
- “eligible instruments”
4. These instructions shall be applicable with immediate effect.
5. AD Category – I banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
6. The Directions contained in this circular have been issued under sections 10(4) and
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions/approval, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
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