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Masala Bonds

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About Masala Bonds:

Masala Bonds are rupee-denominated borrowings issued by Indian entities in overseas markets.

The objective of Masala Bonds is to fund infrastructure projects in India, fuel internal growth via borrowings and internationalize the Indian currency.

Who can issue these bonds?

The bond can be issued in a country and subscribed by a resident of such a country that is a member of the Financial Action Task Force and whose securities market regulator is a member of the International Organisation of Securities Commission. It can also be subscribed by multilateral and regional financial institutions where India is a member country. The first Masala bond was issued in 2014 by IFC for the infrastructure projects in India.

How does Masala Bonds help bond issuers?

As Masala bonds are issued directly in Indian rupees, the investor needs to bear the exchange rate risks. Rupee rate falls will not affect the issuer of Masala Bonds. In simpler words, as Masala Bonds are rupee-denominated bonds, the risk goes directly to the investor.

About India INX:

India INX is the country’s first international exchange, located at International Financial Services Centre, GIFT City in Gujarat.

 

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