RBI announces host of measures to attract foreign capital

To attract foreign capital the Reserve Bank of India (RBI) on Friday (June 5, 2026) announced several measures. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to keep the repo rate unchanged for the second time in a row, at 5.25%, Governor Sanjay Malhotra announced.

For government securities under the Fully Accessible Route (FAR), the RBI said it was expanding the universe of ‘specified securities’ by including all new issuances of 15-, 30- and 40-year tenor G-secs. 

In addition, limits pertaining to short-term investment, concentration and individual securities on FPI investment under the General Route are being removed. 

Also Read : RBI Monetary Policy Committee updates

“These measures along with the tax benefits provided by the government this morning should help attract foreign capital for government borrowing,” Mr. Malhotra said.

The RBI has also decided to increase the limits for investment by NRIs and OCIs in equity instruments traded on the stock market without SEBI registration.

Further, the same facility is being extended to all individual Persons Resident Outside India (PROIs) at par with NRIs and OCIs.

The RBI has decided to provide facility of concessional forex swap till September 30, 2026 to incentivize ECBs by PSUs.

Also a similar facility for bearing the full hedging cost will be provided till 30th September 2026 to AD banks for raising fresh 3–5-year FCNR (B) deposits.

The RBI has proposed to restore the time for realisation of export proceeds to nine months from 15 months currently. 

“While these measures are expected to strengthen our balance of payments, we will continue to make the right policy adjustments to further promote exports and attract and incentivise capital inflows,” Mr Malhotra said. 

He emphasised that RBI’s exchange rate policy remained unchanged. 

“We do not target any specific level or band; instead, we allow the exchange rate to be determined by market forces. Our experience, however, suggests that it may sometimes witness movements, often caused by speculative pressures, especially in the wake of heightened uncertainty, that are not in sync with fundamentals and are disruptive of economic activity,” he said.

“While our objective is not to resist market-driven adjustments, we will curb excessive volatility and prevent disorderly market movements,” he said.

“While our foreign exchange reserves provide a strong buffer against external shocks, we have a broad range of regulatory and market-based instruments to respond effectively as may be required. In this regard, we remain vigilant and are fully prepared to do whatever it takes to preserve orderly market conditions,” he added