CALCULATE YOUR SIP RETURNS

RBI Expands FAR Scope, Opens 10-Yr Sovereign Green Bonds to Non-Residents

11 November 20243 mins read by Angel One
The Reserve Bank of India has made the 10-year sovereign green bonds available via the Fully Accessible Route (FAR) category for non-resident investors.
RBI Expands FAR Scope, Opens 10-Yr Sovereign Green Bonds to Non-Residents
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

FAR Overview 

Through the ‘Fully Accessible Route’ (FAR),  the Reserve Bank enables non-residents to invest in specified Government of India dated securities. Eligible investors can invest in specified Government securities without being subject to any investment ceilings.

Expansion of Investment Options

The Reserve Bank of India (RBI) has broadened the range of specified government securities available for non-resident investors under the Fully Accessible Route (FAR) by adding 10-year Sovereign Green Bonds (SGrBs) to the list.

The inclusion of green bonds in the FAR category is expected to attract greater foreign investor interest. These green bonds are designed to help the government raise capital to fund sustainable initiatives for public sector projects.

Investors eligible to invest through the FAR route include Foreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and other entities authorized to invest in Government Securities under the Debt Regulations.

The central bank has announced that the 10-year Sovereign Green Bonds (SGrBs) to be issued by the Government in the latter half of the 2024-25 fiscal year will be classified as ‘specified securities’ under the Fully Accessible Route (FAR).

According to the provisional schedule for the issuance of government securities, including Sovereign Green Bonds (SGrBs), for the second half of the fiscal year 2024-25 (from October 1, 2024, to March 31, 2025), the government plans to raise ₹6.61 lakh crore. 

Background and Context

This move follows the inclusion of Indian Government Securities (G-Secs) in JPMorgan Chase’s benchmark Emerging Markets Bond Index Global Diversified (GBI-EM GD), which took effect on June 28, 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

We're Live on WhatsApp! Join our channel for market insights & updates

Open Free Demat Account!

Enjoy ₹0 Account Opening Charges

Join our 2 Cr+ happy customers

+91
Enjoy Zero Brokerage on Equity Delivery
4.4 Cr+DOWNLOADS
Enjoy ₹0 Account Opening Charges

Get the link to download the App

Send App Link
Get it on Google PlayDownload on the App Store
Open Free Demat Account!
Enjoy ₹0 Account Opening Charges