UPSC Prelims Practice Questions — Central bank announces host of measures to attract foreign capital

Q1. The Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026, under which the equity investment ceilings for NRIs and OCIs in listed Indian companies were enhanced, have been notified under which one of the following statutes?

  • A. Securities and Exchange Board of India Act, 1992
  • B. Government Securities Act, 2006
  • C. Foreign Exchange Management Act, 1999
  • D. Securities Contracts (Regulation) Act, 1956

Q2. With reference to the changes announced by the Reserve Bank of India in June 2026 regarding investment by Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in listed Indian companies, consider the following statements: 1. The cap on the shareholding of an individual NRI/OCI in the paid-up capital of a listed Indian company has been raised from 5% to 10%. 2. The aggregate ceiling for all NRIs/OCIs taken together in a listed Indian company has been raised from 10% to 24%. 3. Under the revised framework, NRIs investing within these enhanced ceilings must first obtain registration with SEBI as Foreign Portfolio Investors. Which of the statements given above is/are correct?

  1. The cap on the shareholding of an individual NRI/OCI in the paid-up capital of a listed Indian company has been raised from 5% to 10%.
  2. The aggregate ceiling for all NRIs/OCIs taken together in a listed Indian company has been raised from 10% to 24%.
  3. Under the revised framework, NRIs investing within these enhanced ceilings must first obtain registration with SEBI as Foreign Portfolio Investors.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q3. In its June 2026 package of measures to attract foreign capital, the RBI expanded the pool of securities eligible under the Fully Accessible Route (FAR) by adding new issuances of how many additional G-sec tenors?

  • A. Two
  • B. Three
  • C. Four
  • D. Five

Q4. The Foreign Exchange Management (Non-Debt Instruments) Rules, under which the revised equity investment ceilings for NRIs, OCIs and other Persons Resident Outside India announced in June 2026 are operationalised, are notified by which one of the following?

  • A. Reserve Bank of India
  • B. Securities and Exchange Board of India
  • C. Ministry of Finance, Department of Economic Affairs
  • D. Ministry of Corporate Affairs