RBI plans voluntary retention route to attract long-term overseas money

Foreign portfolio investors to get allocation based on how long they plan to stay invested

As a step to attract long-term overseas money in debt, the Reserve Bank of India will open “voluntary retention route” (VRR), giving Foreign Portfolio Investors (FPI) more flexibility in choice of instruments and leeway in regulatory provisions.

The investments through this route will be in addition to the existing investment avenue available to FPIs. The RBI in a discussion paper said the minimum retention period will be three years, or as decided by the regulator for each auction. The allocation of the investment amount to each FPI (called committed portfolio size, or CPS) will be based on the retention