The main objective of the Voluntary Retention Route is on attracting long-term as well as stable FPI investments in the country’s debt markets. Know all about debt instruments

VRR also gives the FPIs flexibility in their investments as well as checks the depreciation of the Indian rupee at the times when there is outflow of the foreign currency. VRR is a channel that separately acts on the betterment of the Indian economy by attracting long-term as well as stable FPI in the country’s debt markets.

The Reserve Bank of India introduced the Voluntary Retention Route in the March 2019. This was done when the Indian Rupee value was depreciating in comparison to the value of the US Dollar.

The FPIs are required to voluntarily commit a minimum percentage of their overall investments in India for a time span of their choice to the VRR.

Any entity that is registered with the Securities and Exchange Board of India (SEBI) as an FPI can be eligible for investment through Voluntary Retention Route.

The minimum retention period under investment through VRR is at present 3 years. This also gets regulated as per the decisions of the Reserve Bank of India in the case of each auction.

The total investment amounts through VRR shall get separately indicated for corporate debt (VRR-Corp) and Government securities (Central Government securities and the State Development Loans, VRR-Govt).

The investment limit by the FPIs under VRR has increased to INR 1,50,000 crore from earlier INR 75,000 crore. Investments made via this channel will be allotted on the first-come, first-serve basis.