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Question

The rupee denominated bond issued outside India by Indian entities. They are debt instruments help to raise money in local currency from foreign investors. They are called ______

A Masala Bonds Correct Answer Incorrect Answer
B Euro Bonds Correct Answer Incorrect Answer
C Covered Bonds Correct Answer Incorrect Answer
D Foreign Bonds Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

Masala Bonds are rupee-denominated bonds issued outside India by Indian entities. They are debt instruments which help to raise money in local currency from foreign investors. Both the government and private entities can issue these bonds. Investors outside India who would like to invest in assets in India can subscribe to these bonds. Any resident of that country can subscribe to these bonds which are members of the Financial Action Task Force. The investors who subscribe should be whose securities market regulator is a member of the International Organisation of Securities Commission. Multilateral and Regional Financial Institutions which India is a member country can also subscribe to these bonds.

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