BBN Bureau
New ceiling effective from April 1
MUMBAI/February 10-2022: The Reserve Bank of India (RBI) has raised the ceiling for Voluntary Retention Route (VRR) for foreign portfolio investors by one lakh crore from the current Rs1.5 lakh crore up to Rs2.5 lakh crore and this will be effective from April 1, 2022, the RBI said in a statement.
The RBI introduced VRR for FPIs on March 1, 2019. An amount of Rs1.5 lakh crore was offered for investment through VRR, in three tranches so far; of which around Rs1,49,995 crore have been availed as on February 10, 2022.
The RBI Governor, Shaktikanta Das, said the move was primarily prompted by the increased interest shown by the FPIs that saw the investment through this route reach close to the limit.
“Based on the feedback received, and in consultation with the Government, RBI has increased the investment limits available under the VRR,” the RBI statement said.
The minimum retention period under VRR shall be three years and the investment limits shall be available ‘on tap’ and allotted on ‘first come, first served’ basis. The ‘tap’ shall be kept open till the limit is fully allotted.
RBI said that FPIs can apply for investment limits online to Clearing Corporation of India Ltd. (CCIL) through their respective custodians and CCIL will separately notify the operational details of application process and allotment.
