MUMBAI (Reuters) - The Reserve Bank of India (RBI) said it would allow foreign institutional investors (FIIs) to invest up to $5 billion in credit-enhanced bonds issued locally by Indian companies.
Credit-enhanced bonds are debt instruments that can be issued by lower-rated companies to improve the credit profile of their debt issuances.
Earlier this year, the RBI allowed non-resident entities to provide credit enhancement to Indian companies.
In a circular issued late on Monday, the central bank said the $5 billion limit would be part of the overall $51 billion quota for corporate debt investment by FIIs.
(Reporting by Himank Sharma and Suvashree Dey Choudhury; Editing by Kevin Liffey)