RBI raises investment limit for foreign portfolio investor’s investment in debt.

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The Reserve Bank of India vide notification dated 23rd January 2020 has raised the investment limit for Foreign Portfolio Investors (FPO) investment through the Voluntary Retention Route. Only those FPI registered with SEBI are eligible to participate in this Voluntary Retention Route.(VRR)

Investment under this route shall be has been raised to 1,50,000 crores from Rs 75,000 crores, which shall be allocated among VRR-Government, VRR-Corporation, and VRR-Combined as may be decided by the Reserve Bank from time to time. The investment limit shall be released in one or more tranches. The mode of allotment, allocation to VRR-Govt, VRR-Corp and VRR-Combined categories and the minimum retention period shall be announced by the Reserve Bank ahead of allotment.

FPIs that have been allotted investment limits under VRR may, at their discretion, transfer their investments made under the general investment limit to VRR.

Further the FPIs are also allowed to invest in exchange-traded funds that invest only in debt instruments.

Click here to read the Notification

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