The RBI in the guidelines said that IFSC Banking Unit (IBU) of foreign banks which do not have a branch or subsidiary licensed banking in India would be eligible to invest in the sovereign green bonds.
The issues would be targeted at international investors looking to green credits.
RBI said that funds and schemes including the ones setup by entities incorporated in India, regulated by International Financial Services Centres Authority (IFSCA) too will be eligible to invest in the bonds.
Those individuals residing outside India but are eligible to invest in IFSC too would be eligible investors.RBI said that investments in the sovereign green bonds other than those designated as ‘specified securities’ under the Fully Accessible Route (FAR) will be part of the investment limits prescribed for Foreign Portfolio Investors (FPI).An IBU of a bank in India and an IBU of a foreign bank which has a branch or subsidiary licensed will also be eligible to invest in these bonds.Following an announcement in the Union budget for FY23, the government issued Sovereign Green Bonds (SGrBs) in January 2023 and later they were also issued as part of the government borrowing calendar in FY 2023-24.
At present, foreign portfolio investors (FPIs) registered with SEBI are permitted to invest in SGrBs under the different routes available for investment by FPIs in government securities.
In a monetary policy RBI announced that to facilitate wider non-resident participation in SGrBs, it decided to permit eligible foreign investors in the IFSC to also invest in such bonds.
