RBI introduced a separate channel, the ‘Voluntary Retention Route’ in 2019 to enable FPIs to invest in debt markets in India.
Investments through VRR are free from macro-prudential and other regulatory prescriptions applicable to FPI investments in debt markets, provided FPIs voluntarily commit to retain a required minimum percentage of their investments in India for a particular period. The minimum retention period was kept at three years.
The Reserve Bank of India (RBI) permitted more time to foreign portfolio investors (FPIs) in adhering with the condition under the Voluntary Retention Route (VRR).
Aim of VRR:
The VRR channel is aimed at attracting long-term and stable FPI investments into debt markets, while providing FPIs with operational flexibility to manage their investments.
VRR scheme tallows FPIs to participate in repos and also invest in exchange traded funds that invest in debt instruments.
Eligibility of VRR:
Any entity registered as an FPI with SEBI is eligible to participate through this Route.
Rajveer Thakur
Voluntary Retention Route (VRR):
Aim of VRR:
Eligibility of VRR: