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RBI has, by way of a Circular dated February 6, 2026, amended the Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 to introduce the following key changes to the framework governing investments through the Voluntary Retention Route (‘VRR’) by and FPI), which will be effective on and from April 1, 2026:
i. All investment limits prescribed for investments in Central Government securities (including treasury bills), State Government securities and corporate debt securities, respectively, will take into account investments through both the general route and the VRR, and there will not be any separate investment limits for VRR; and
ii. The Master Directions prescribe a minimum retention period of three years from the date of allotment of investment limit. However, for FPIs who have availed additional time to invest, the minimum retention period commences from the date where the FPI invests 75% of its committed portfolio size. Pursuant to the recent amendments, FPIs may now opt to liquidate their portfolio, fully or partly, and exit at the end of three years from the date of allotment of investment limit even if they had committed to a longer retention period.
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