what is Fully Accessible Route

Apr 30, 2020 - 12:40
Dec 27, 2020 - 13:27

The Reserve Bank of India (RBI) has introduced a separate channel, namely Fully Accessible Route&rsquo (FAR), to enable non-residents to invest in specified government bonds with effect from April 1. Fully Accessible Route (FAR). The move follows the Union Budget announcement that certain specified. categories of government bonds would be opened fully for non-resident investors without any restrictions. Under FAR, eligible investors can invest in specified government securities without being subject to any investment ceilings. This scheme shall operate along with the two existing routes, viz., the Medium Term Framework (MTF) and the Voluntary Retention Route (VRR).

(The following is the official letter from RBI for complete details please Click Here )

Fully Accessible Route’ for Investment by Non-residents in Government Securities

A reference is invited to the announcement made in the Union Budget 2020-21 that certain specified categories of Central Government securities would be opened fully for non-resident investors without any restrictions, apart from being available to domestic investors as well. Accordingly, a separate route viz., Fully Accessible Route (FAR) for investment by non-residents in securities issued by the Government of India has been notified in terms ofA.P. (DIR Series) Circular No. 25 dated March 30, 2020, issued today.

2. The Reserve Bank shall notify the Government securities that shall be eligible for investment under the FAR (hereinafter, ‘specified securities’). These securities will continue to be eligible for investment by residents. Specified securities’, once so designated, shall remain eligible for investment under the FAR until maturity.

3. The Government securities listed in theAnnexwill be eligible for investment under the FAR, from the date on which the scheme comes into effect.In addition, all new issuances of Government securities of 5-year, 10-year and 30-year tenors from the financial year 2020-21 will be eligible for investment under the FAR as ‘specified securities’. The Reserve Bank may add new tenors or change the tenors of new securities to be designated as ‘specified securities’ from time to time.

4. The directions contained in this circular have been issued under Section 45W of Chapter IIID of the Reserve Bank of India Act, 1934 and are without prejudice to permissions/ approvals, if any, required under any other law.

5. The directions shall come into effect from April 1, 2020.

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