The Reserve Bank of India (RBI), through A.P. (DIR Series) Circular No. 13 dated 3 October 2025, has permitted persons resident outside India maintaining Special Rupee Vostro Accounts (SRVA) to invest their rupee surplus balances in a wider range of instruments. Previously, such balances could only be invested in Central Government Securities, including Treasury Bills. Under the new directive, non-residents can now also invest in non-convertible debentures (NCDs), bonds, and commercial papers issued by Indian companies.
The changes have been incorporated into the Master Direction – Non-Resident Investment in Debt Instruments, 2025, modifying multiple paragraphs to include these corporate debt instruments as “eligible instruments.” Investments through SRVA will be treated under the General Route limit for corporate debt securities, but key relaxations include the non-applicability of minimum residual maturity and issue-wise investment limits that typically apply to Foreign Portfolio Investors (FPIs).
Authorised Dealer (AD) Category-I banks must facilitate separate demat accounts for SRVA holders to manage such investments and report related transactions to SEBI-registered depositories. The responsibility for compliance with investment limits rests with SRVA holders and their respective banks.
This move, effective immediately, aims to expand investment avenues for trading partners and non-resident entities settling trade in Indian Rupees, thereby enhancing rupee liquidity in global trade. The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and operate without prejudice to any additional permissions required under other applicable laws.
The circular, signed by Dimple Bhandia, Chief General Manager, builds upon RBI’s earlier circulars issued in July and August 2025 to progressively widen the scope of rupee-based trade and investment mechanisms.
Reserve Bank of India
India’s Central Bank
Notifications
Investment in Corporate Debt Securities by Persons Resident Outside India through Special Rupee Vostro account
RBI/2025-26/90
A.P. (DIR Series) Circular No. 13 Dated: 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”
(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.
(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
