The Reserve Bank of India (RBI) on May 22 gave foreign portfolio investors (FPIs) another three months to fulfil the requirement of meeting at least 75 percent of the allotted limits under Voluntary Retention Route (VRR).
" In view of difficulties expressed by FPIs and their custodians on account of COVID-19 related disruptions in adhering to the condition that at least 75 percent of allotted limits be invested within three months, it has been decided that an additional three months will be allowed to FPIs to fulfil this requirement."
Here's the full text of RBI Governor Shaktikanta Das' May 22 conference
The regulatory framework for FPI investment in debt has evolved over the years in line with the policy objective of encouraging such flows within the prevailing macro-prudential framework.
The Voluntary Retention Route (VRR) introduced in March 2019 facilitates long term and stable FPI investment in debt and offers operational flexibility in terms of instrument choices and exemptions from certain regulatory requirements.
Since its introduction, VRR scheme has seen strong participation, with investments exceeding 90 percent of the limits allotted under the scheme.
Detailed guidelines are being issued separately.
Check our complete coverage on RBI's May 22 announcements here
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