Indians who have settled abroad and who have had investment aspirations had to contend their investments in India to largely purchasing of real estate & banking instruments. However with the RBI taking measures to encourage their investments in India they can now heave a sigh as RBI now allows qualified foreign investors to directly invest in Indian markets.
Who is a Qualified Foreign Investor (QFI) ? : A Qualified foreign investor refers to an individual group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. Readers please note that QFIs would not include FIIs/sub accounts.
This in my belief is a very smart move by RBI, as it understands that foreign remittance can play a very big role in lifting up the sagging economy. When the rupee was going through a very tough time and depreciated sharply compared to the dollar, foreign investors especially NRIs seized this opportunity to increase the remittance being sent to India. RBI acknowledged that this foreign remittance should be given greater bandwidth and thus made amends to make sure that better instruments (bonds, mutual funds) could be provided to encourage more foreign participants
Steps by the RBI to encourage foreign remittance and make the foreign retail investors more active in investing is a good move, as India based investors are especially staying back towards active investments as they realize the volatility phase the markets are going through currently.
RBI has especially made lucrative routes for NRIs to invest especially in hedging of currencies and mutual funds that NRIs long desired to be part of. The government recently allowed QFI’s to invest up to 1 billion in the corporate bond market as well as Debt mutual funds without any lock in period.
Thus if you are an NRI and would like to invest bond market and debt mutual funds, it would be prudent for you to enquire into becoming a Qualified foreign investor, as this would allow you to invest in a variety of investing instruments for wealth creation in the long run.
Disclaimer:
1. Views as are mentioned in the article are personal views of Author and nothing to link with Co., its Director and Employees.
2. All investments are subject to market risk and you need to consult your financial advisor/consultant before investment
