"The portfolio investor registered in accordance with Sebi guidelines shall be called Registered Foreign Portfolio Investor (RFPI)," the RBI said in a notification on Tuesday.
The notification is effective from March 19.
The existing portfolio investor class - namely, foreign institutional investors (FIIs) and qualified foreign investors (QFIs) - registered with market watchdog Securities and Exchange Board of India (Sebi) shall be subsumed under RFPIs, it said.
The guidelines for the Portfolio Investment Scheme for foreign institutional investors (FIIs) and qualified foreign investors (QFIs) have since been reviewed and it has been decided to put in place a framework for investments under a new scheme called Foreign Portfolio Investment scheme, it said.
An RFPI may purchase and sell shares and convertible debentures of an Indian company through a registered broker on recognised stock exchanges in India as well as purchases shares and convertible debentures which are offered to public in terms of relevant Sebi guidelines, the RBI said.
Such investors "may also acquire shares or convertible debentures in any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central Government or any State Government", it said.
These entities would be eligible to invest in government securities and corporate debt subject to limits specified by the RBI and Sebi from time to time, it added.
However, it said, all investments made by that FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit.
The RBI said such investors would be permitted to trade in all exchange traded derivative contracts on the bourses in India subject to the position limits as specified by Sebi from time to time.
"RFPI may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic Government Securities, as collateral to the recognised Stock Exchanges for their transactions in the cash as well as derivative segment of the market," it said.