Hi Thomas,
it doesn't have any function when using VRF light without MP-BGP, it's just a mandatory command for VRFs in IOS.
Hope that helps
Rolf
[EDIT]:
There are IOS versions that do not require the configuration of a RD to make VRF lite work.
Unfortunately I don't know what versions; we always use the RD in VRF lite as a matter of principle.
Technically, the RD belongs to the BGP Multiprotocol Extensions and I've read that in IOS-XR it has to be configured under BGP, not under VRF, which I find less confusing.
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