Brief Overview:
VRR framework streamlined by subsuming investment limits for FPIs under the General Route, simplifying FPI debt investments and enhancing flexibility and liquidity.
All existing VRR investments will be automatically transitioned to the General Route framework from April 1, 2026.
Technical Details:
Key Highlights
1) VRR investments will now count towards the existing FPI limits under the General Route for G‑secs and corporate debt.
2) The earlier ₹2,50,000 ‑ crore VRR limit framework is removed; VRR investments will simply fall under the General Route limits specified.
3) FPIs with retention periods longer than the minimum can now exit VRR fully or partly once the minimum retention period ends.
Takeaways:
RBI’s integration of the VRR framework into the General Route and relaxation of exit constraints materially reduces regulatory complexity while enhancing liquidity and investment certainty for FPIs in the debt market.
For further details, please see:
Voluntary Retention Route circular
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