Direct Answer
The deployment of FCA is strictly governed by Section 33(6) of the RBI Act, 1934, which explicitly prioritizes safety and liquidity over aggressive yield generation
Permitted (Safe-Haven Assets)
– Debt of foreign sovereigns (US Treasuries)
– Deposits with BIS/other Central Banks
– Deposits with rated commercial banks
– Debt of supranational institutions (World Bank)Prohibited (Risk Assets)
– Foreign corporate equities (Stocks)
– High-yield (Junk) corporate bonds
– Unrated speculative financial derivatives
– Real estate assets abroad
– Debt of foreign sovereigns (US Treasuries)
– Deposits with BIS/other Central Banks
– Deposits with rated commercial banks
– Debt of supranational institutions (World Bank)Prohibited (Risk Assets)
– Foreign corporate equities (Stocks)
– High-yield (Junk) corporate bonds
– Unrated speculative financial derivatives
– Real estate assets abroad