The government has amended the investment pattern of provident, superannuation and gratuity fund capping the maximum exposure in bonds to 30 per cent from the earlier limit of 40 per cent.
According to the new norms, PF and gratuity funds can now invest in short duration term deposits of banks.
"The percentage amount to be invested in bonds, securities of financial institutions, banks and PSUs has been reduced from the existing 40 per cent to 30 per cent," an official release said on Friday.
However, the exposure for Trusts in bonds has been hiked to 30 per cent from 20 per cent.
Further, in case the rating of any bond or security is downgraded by at least two credit rating agency, then provident funds can exercise the option of selling the bonds.