MUMBAI: Reserve Bank governor Shaktikanta Das will meet top global funds in Singapore and Hong Kong next month to sell India’s growth story and shore up foreign fund inflows, people with direct knowledge of the matter told ET.
The closed-door meeting, perhaps the first of its kind, is likely to take place in the second or third week of February with an expected 40-50 participants, including executives from GIC, Temasek, Aberdeen Asset Management, Prudential Plc (UK), Eastspring Investments, Nomura, Goldman Sachs and Morgan Stanley. The huddles come amid growing expectations that RBI will ease investment rules for foreign portfolio investors.
The governor, who took charge on December 12, is expected to convey RBI’s monetary policy stance and brief investors on India’s macroeconomic conditions, the people said. This will be followed by question-and-answer sessions, they said. The objective is to find out what stops global investors from bringing in long-term money into the world’s fastest-growing major economy.
ACHARYA PLAYING BIG ROLE
“The meeting should significantly boost global investor confidence as the RBI governor himself is going to address investors directly,” one person told ET.
The ministry of finance and its department of economic affairs usually hold investor roadshows abroad. Sebihas also held such interactions under former chairman UK Sinha. Former RBI governors including Raghuram Rajan have travelled overseas to meet investors but via public events.
This time, the RBI initiated the move to connect with foreign custodian banks including Citibank, DBS, Deutsche Bank, HSBC and JP Morgan and ask them to submit lists of their top clients, which are global sovereign funds, asset management companies and pension funds, the people said.
“The RBI has already received a list of submissions as it is now keen to have long-term foreign money both in debt and equity,” said one person. An email query sent to the RBI remained unanswered until publication of this report. All the custodian banks declined to comment on the matter, while overseas participants could not be contacted immediately.
“Deputy Governor Viral Acharya is also playing a big role in communicating with the related parties,” said a senior banker. Last week, RBI officials met local FPI representatives here to find out their operational difficulties.
Acharya is said to have told investors they would be able to avail of the proposed Voluntary Retention Route, which will exempt FPIs from regulatory provisions, but require them to retain a minimum portion of their investments in India for a duration of their choosing. The proposal is meant to help stabilise overseas inflows. The RBI also wanted them to use the interest rate derivatives market to cover their currency risk. Foreign portfolio investors have sold a net Rs 5,915 crore of domestic securities this year while they exited a record Rs 80,919 crore of investments in 2018, according to data from the National Securities Depository Ltd.
Source: Economic Times