RBI Allows Non-Residents to Trade Sovereign Green Bonds in IFSC via Inward Remittance or Funds in Foreign Currency A/c

Notification No. No. FEMA. 396 (3)/2024-RB; Dated: 02.08.2024

The RBI has notified the Foreign Exchange Management (Debt Instruments) (Third Amendment) Regulations, 2024. A new sub-paragraph has been added to Schedule 1 i.e. Purchase and sale of debt instruments by a person resident outside India. As per the amended norms, a person resident outside India who maintains a securities account with a depository in IFSC in India may purchase or sell Sovereign Green Bonds issued by the Government of India, as per terms and conditions specified by the Reserve Bank.

Further, the amount of consideration for the purchase of Sovereign Green Bonds (SGBs) issued by the Government of India by persons resident outside India must be paid out of inward remittance from abroad through banking channels or out of funds held in a foreign currency account maintained in accordance with the regulations issued by the RBI and/or the International Financial Services Centre Authority.

Also, the sale/ maturity proceeds (net of taxes, as applicable) of SGBs held by persons resident outside India may be remitted outside India.

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