RBI

RBI allows persons resident outside India for purchase of Sovereign Green Bonds

Permission to persons resident outside India for purchase of Sovereign Green Bonds in the International Financial Services Centre (IFSC) in India

RBI allows permission to persons resident outside India for purchase of Sovereign Green Bonds in the International Financial Services Centre (IFSC) in India.

In keeping with the ambition to significantly reduce the carbon intensity of the economy, the Union Budget 2022-23 announced the issue of Sovereign Green Bonds. It was stated that Sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.

Reserve Bank of India has notified the Foreign Exchange Management (Debt Instruments) (Third Amendment) Regulations, 2024 allowing permission to persons resident outside India for purchase of Sovereign Green Bonds in IFSC in India.

It has been provided that persons resident outside India that maintain 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.

Secondly, the amount of consideration for purchase of Sovereign Green Bonds issued by the Government of India by persons resident outside India shall 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 Reserve Bank and/or the International Financial Services Centre Authority.

The sale/ maturity proceeds (net of taxes, as applicable) of Sovereign Green Bonds held by persons resident outside India may be remitted outside India.

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