BANKING AFFAIRS

Detailed explanation-1: -Rupee denominated bonds are also called masala bonds because they are issued outside India in Indian currency rather than any other local currency. Also, the word Masala means Indian spices. International Finance Corporation (IFC) used the term Masala to evoke the cuisine and culture of India.

Detailed explanation-2: -Masala Bonds are debt instruments that are used to attract capital from international investors in the form of local currency. These are issued outside of India by an Indian entity as rupee-denominated bonds.

Detailed explanation-3: -Masala Bonds are rupee-denominated bonds. It is a debt instrument issued by an Indian entity in foreign markets to raise money, in Indian currency, instead of dollars or local denomination. In 2019, Kerala became the first Indian state to issue Masala Bonds worth Rs. 2, 150 crore on the London Stock Exchange.

Detailed explanation-4: -Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency. Masala is a Hindi (one of the languages spoken in India) word and it means spices. The term was used by the International Finance Corporation (IFC) to evoke the culture and cuisine of India.

Detailed explanation-5: -The IFC issued the first masala bonds in India to fund infrastructure projects. Indian entities or companies issue masala bonds outside India to raise money. The issue of these bonds is in Indian currency rather than local currency. Thus, if the rupee rate falls, the investor will bear the loss.