RBI proposes to extend Voluntary Retention Route (VRR) by Rs1 lakh crore from April 01, 2022

10 Feb 2022 , 12:02 PM

On expected lines, the Reserve Bank of India (RBI) has proposed to increase the investment limit under Voluntary Retention Route (VRR) by Rs1 lakh cr with effect from April 01, 2022. The announcement was made during the last bi-monthly monetary policy outcome for FY22.

Today, RBI stated that given the positive response to the VRR as evident from the near exhaustion of the current limit, it is proposed to increase the investment limit under VRR by Rs1,00,000cr to Rs2,50,000cr with effect from April 1, 2022.

The revised investment limits are being notified today.

VRR for investment in government and corporate debt securities by Foreign Portfolio Investors (FPIs) was introduced on March 01, 2019, to facilitate stable investments in debt instruments issued in the country.

The Route sought to provide a separate channel, broadly free of macroprudential controls, to FPIs with long-term investment horizons.

A dedicated investment limit of Rs1,50,000cr was set for investments under the VRR. RBI proposes to extend the limit to Rs2,50,000cr.