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National Securities Depository Released 'Assets Under Custody Report'

Published on April 12, 2023
Current Context: The National Securities Depository has released the Assets Under Custody (AUC) report for the financial year 2022-23, which details the financial flows of foreign portfolio investors.
National Securities Depository Released 'Assets Under Custody Report'
  • The National Securities Depository recently released the Assets Under Custody (AUC) report for the financial year 2022-23, which reveals financial flow information about foreign portfolio investors.
  • The report highlights the major countries from which maximum FPI has been received, including the US, Singapore, Luxembourg, Mauritius, and the UK.
  • However, Mauritius experienced the biggest decline in foreign capital inflows, while Norway and Singapore registered an increase in AUC of 13% and 5%, respectively.
  • The report also shows that the Assets Under Custody from Mauritius are expected to decline by about 42% to Rs 6.66 trillion by the end of March 2023 from Rs 10.88 trillion in the previous year.
  • Experts suggest that this decline is due to the renegotiation of the India-Mauritius tax agreement, greater sensitivity on capital flows, and facing stiff competition from GIFT City. Furthermore, the Assets Under Custody of Foreign Portfolio Investors decreased by 4.44% in the financial year 2022-23 due to asset value erosion and capital outflows of over Rs 35,000 crore. In the previous year of 2022, FPI outflow reached a record high of ₹1.21 lakh crore.
National Securities Depository
  • The National Securities Depository Limited (NSDL) is a central securities depository of India, based in Mumbai.
  • It was established on November 8, 1996, to handle securities in electronic form and aims to ensure the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and reduce costs.
  • The NSDL provides various services related to securities including depository services, e-IPO, e-voting, and e-insurance. It also provides facilities for the holding of mutual funds and exchange-traded funds (ETFs).

Question:

Q.1 According to the report of the National Securities Depository for the financial year 2022-23, which countries have the maximum FPI inflow in India?
a. Singapore, Mauritius, Luxembourg
b. America, Singapore, Luxembourg
c. Britain, Singapore, Mauritius
d. Mauritius, America, Britain
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