Mumbai: The Association of Mutual Funds in India (AMFI) on Sundays asked all house funds to stop any additional investment abroad, effectively February 2.
Some housing funds have limited inflows into schemes that invest abroad.
However, industrial players say that there is enough indication that this problem will be resolved soon, unless the RBI does not want to let Indians invest abroad through this route.
According to Balasubramanian, Chairman of the MF Amfi Industrial Trade Agency, is understood that the government has increased this limit to $ 15 billion.
This might get immediate notice, both by the government and the RBI.
“After notified, it will be a business as usual.
Therefore, someone has to wait for clarity about this problem,” Balasubramanian, who is also MD & CEO Aditya Birla MF, said.
According to industry sources, last week had checked the total MFS investment position in foreign assets and found that the limit was fully used.
Furthermore, he asked for Houses funds to limit additional investments abroad, which lead to Amfi’s direction.
The $ 7 billion limit was set in June 2021 with individual fund house limits set at $ 1 billion.
Further sources say that the government has proposed more than double the $ 7-billion limit to $ 15 billion, but the increase will be placed for several years.
The refined limit will only apply after the RBI issued a circle.
“Officials seem to feel until such circles are issued, housing funds may not make additional investments abroad,” said the source.
The statement from the government can also come during the Minister of Finance’s budget speech on Tuesday, the source said.
Balasubramanian, however, clarified that the current situation was not a big challenge and he hoped it would be resolved soon.
Indian fund houses have invested abroad for more than a decade.
Trends, however, have collected steps in recent years after fund houses began launching traded funds and funding funds to invest in the schemes sold and managed abroad.
Another clear trend is the equity scheme that invests part of their corpus abroad.
Although SEBI allows home funds to invest up to 15% of their total corpus abroad about a decade ago, for several years there are only a few schemes that utilize this limit.
But a large number of Indian fund managers have taken this route in just the last three years.
These two factors together have led the Indian Fund House to close on SEBI which was subject to a $ 7-billion limit to invest abroad.