The Finance Ministry on Tuesday relaxed norms for qualified financial investors, expanding the list of countries from where QFIs can invest in Indian equity markets.

QFIs are a class of investors that include institutions, groups and associations that have residency status outside of India in a country that is compliant with FATF (Financial Action Task Force). However, QFIs do not include foreign institutional investors (FIIs).

Under Tuesdays guidelines, the government widened the definition of QFIs. Investors from 33 more countries from Europe and West Asia that are not part of the FATF will now be able to invest their wealth in India.

Officials of the India government, RBI and SEBI, along with BNP Paribas and Deutsche Bank, will start roadshows starting June 1 to countries in West Asia to promote QFI schemes.

The government has also widened the scope of investments through the QFI route such investors will be allowed to open individual non-interest bearing rupee bank accounts, and a separate sub-limit of $1 billion has been created for such investments in corporate bonds or mutual fund debt schemes.

An earlier restriction on the number of days that QFIs can keep funds in their accounts has been lifted. QFis will now be allowed to keep funds for more than five days without re-investing.

However, the finance ministry clarified that the debt limit under government securities for FIIs will remain the same.

The Central Board of Direct Taxes will shortly issue clarification on tax-related issues for QFIs. Notifications from the Reserve Bank of India and the Securities and Exchange Board of India to make the changes operational are expected in the next week.

The government first allowed QFIs to enter India in its Budget for fiscal 2012, but restricted them to mutual funds. Earlier this year, in January, the government decided to allow this class of investors to enter the Indian equity market directly.

The government has already exhausted over 82 per cent of the $20 billion investment limit under corporate bonds, and has no plans to revise the debt investment limit for such paper upwards, finance ministry officials said. It has also exhausted over 90 per cent of the investment limit under government securities.