Chart of the day: Participatory notes are steadily going out of fashion

Riken Mehta

The White Paper on Black Money mentions Participatory Notes (PNs) as one of the conduits for bringing back illegal funds stashed abroad. However, as the chart below shows, the proportion of overseas funds coming in through participatory notes (PNs) has been steadily declining. And it is not just in relative terms; even in absolute terms, PN holdings have been shrinking. Bearish market conditions for much of the last four years, and increasing vigilance by regulators are the key reasons for this trend, say brokers. See the chart below

Data Source: SEBI

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