- The Reserve Bank of India (RBI) in consultation with the government of India and the Securities and Exchange Board of India (SEBI), has proposed to introduce a special route, called the ‘Voluntary Retention Route’ (VRR), to enable Foreign Portfolio Investments (FPIs) to invest in debt markets in India.
- Under the proposed Route, FPIs will have more operational flexibility in terms of instrument choices as well as exemptions from regulatory provisions such as the cap on short-term investments, concentration limits, and caps on exposure to a corporate group.
- In return, FPIs would need to voluntarily commit to retain in India a minimum required percentage of their investments for a period of their choice.
