The RBI said in the guidelines that IFSC Banking Units (IBU) of foreign banks which do not have a branch or subsidiary licensed banking in India will be eligible to invest in sovereign green bonds.
These issues will be targeted at international investors looking for green credits.
Funds and schemes set up by entities incorporated in India, regulated by the International Financial Services Centers Authority (IFSCA) will also be eligible to invest in bonds, the RBI said.
Individuals residing outside India but eligible to invest in IFSC will also be eligible investors.
The RBI said that investments in sovereign green bonds designated as ‘prescribed securities’ under the fully accessible route (FAR) will be part of the prescribed investment limits for foreign portfolio investors (FPIs).
An IBU of a bank in India and an IBU of a foreign bank having a branch or subsidiary license will also be eligible to invest in these bonds.
Following the 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.
Currently, Foreign Portfolio Investors (FPIs) registered with SEBI are permitted to invest in SGrBs under various avenues available for investment by FPIs in government securities.
In the monetary policy RBI announced that to facilitate wider non-resident participation in SGrBs, it decided to allow eligible foreign investors in IFSCs to invest in such bonds as well.
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