The Reserve Bank of India issued directions revising the Voluntary Retention Route (VRR) framework for foreign portfolio investor (FPI) investments in debt instruments, bringing VRR investment limits within the existing General Route limits and easing exit conditions for investors that opted for longer retention. Under the revised framework, VRR investments in Central Government securities including Treasury Bills, State Government Securities and corporate debt securities will be counted against the respective General Route investment limits. FPIs that had committed to retention periods longer than the minimum retention period in the Directions may liquidate their portfolio fully or partly and exit the VRR after completing the minimum retention period. The changes take effect from April 01, 2026, with all existing VRR investments on that date to be transferred to the relevant General Route limits. Authorised Dealer Category-I banks are expected to notify affected customers, and the amendments are reflected in updates to the Master Direction on non-resident investment in debt instruments.
Reserve Bank of India 2026-02-06
Reserve Bank of India folds Voluntary Retention Route limits into General Route caps for FPI debt investment and allows exit after minimum retention
The Reserve Bank of India revised the Voluntary Retention Route framework for foreign portfolio investor investments in debt instruments, aligning VRR investment limits with General Route limits and easing exit conditions for longer retention commitments. Effective April 1, 2026, these changes require existing VRR investments to transfer to General Route limits, with updates reflected in the Master Direction on non-resident investment in debt instruments.