Sops for FPI investment in defaulted bonds to boost liquidity February 05, 2021 Market experts also attribute the spike in FPI inflows to the recent spate of fundraising by Indian corporates Market experts also attribute the spike in FPI inflows to the recent spate of fundraising by Indian corporates× In order to further boost foreign portfolio investments in the corporate bond segment, the RBI has proposed to exempt FPI investment in defaulted corporate bonds from the short-term limit and the minimum residual maturity requirement under the Medium Term Framework. Detailed guidelines are being issued separately, said the RBI. At present, foreign portfolio investors can invest in security receipts and debt instruments issued by Asset Reconstruction Companies and debt instruments issued by an entity under the Corporate Insolvency Resolution Process, as per the resolution plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, and these investments are exempted from the short-term limit and minimum residual maturity requirement under the Medium Term Framework for investment by FPIs in corporate bonds.