RBI new norms for FPI in debt.

TNPSC Current Affairs - June 2018 by TNPSC Guru 

• Reserve Bank of India has eased Foreign portfolio investors norms to invest in debts especially in individual large corporates.
• This will help to attract more overseas flows and helps to recover rupee value and also help to lift the recent fall in demand for corporate bonds.
• RBI has increased FPI Cap to 30 % from 20% in investing in Government securities.

Difference b/w FPI and FDI.

• Foreign Portfolio investment is an investment held by foreign investor in Indian securities, bonds and other financial assets .
• Like Foreign Direct investment (FDI) it doesn’t provide direct ownership on financial assets , bonds or securities, instead its goal is to create quick money by investing.
• Foreign investor purchase direct business in other country is called Foreign Direct investment.  
• FPI is more liquid and less risky comparing to FDI.