CURRENT AFFAIRS

Detailed explanation-1: -The limits for FPI investment in Government securities (G-secs), State Development Loans (SDLs) and corporate bonds shall remain unchanged at 6%, 2% and 15% respectively, of outstanding stocks of securities for FY 2022-23.

Detailed explanation-2: -A dedicated investment limit of Rs 1.50 lakh crore was set for investments under the VRR. Given the positive response to the VRR as evident from the near exhaustion of the current limit, it is proposed to increase the investment limit under VRR by Rs 1 lakh crore to Rs 2.5 lakh crore with effect from April 1, 2022.

Detailed explanation-3: -Government securities in the form of GPN, bearer bond, stock and BLA are issued by RBI, while the Agency Banks are presently eligible to issue Relief/Savings Bonds in the form of BLA only.

Detailed explanation-4: -It peaked at 38.5 per cent in 1991 and has been reduced to less than a half (18 per cent as of March 2022) since the 1991 reforms. Banks have often maintained G-secs well above the statutory minimum, in line with their risk appetite and the evolving business cycle.

Detailed explanation-5: -The bank needs to keep the yields in check, so that the government’s borrowing plan can have a smooth going. The government issues bonds to raise money to meet its expenditure, while the yield is the annual return on a bond.