The Reserve Bank of India (RBI) decided to notify a scheme for investment and trading in sovereign green bonds in the IFSC, Governor Shaktikanta Das said on Friday.
The decision was taken at the Monetary Policy Committee (MPC) meeting of the apex bank.
“With a view to facilitating wider non-resident participation in sovereign green bonds, a scheme for investment and trading in these bonds in the IFSC (International Financial Services Centre) will be notified very shortly,” he said.
This will allow eligible foreign investors in the IFSC to also invest in such bonds.
The governor also highlighted that a scheme for investment and trading in sovereign green bonds by eligible foreign investors in IFSC is being notified separately in consultation with the Government and the IFSC Authority.
It may be noted here that based on an announcement in the Union Budget for FY 2022-23, the government of India has Sovereign Green Bonds in January 2023.
These bonds 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.
As per the report, the government plans to borrow Rs 12,000 crore through the issuance of Sovereign Green Bonds in the first half of the current financial year.
According to the Budget Estimate, the government is planning for gross market borrowing of Rs 14.13 trillion for 2024-25. Out of this, Rs 7.5 trillion, or 53 per cent, is scheduled to be borrowed in the first half.
At present, GIFT IFSC is the maiden international financial services centre in India.
Recently, the International Financial Services Centres Authority has allowed remote trading by foreign stock broking firms on Gift IFSC exchanges.
With this arrangement, such firms will be allowed to trade directly on the stock exchanges on a proprietary basis, without a broker-dealer even if they do not have a physical presence at Gift IFSC in the form of a physical office or staff.
Such entities will be referred to as Remote Trading Participants, or RTPs.
At present, countries such as Singapore, Japan, Israel, and the US allow remote membership of brokers.