Multilateral FIs allowed to invest in ‘masala bonds’ | Current Affairs, Current Affairs 2017

Multilateral FIs allowed to invest in ‘masala bonds’

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Multilateral FIs allowed to invest in 'masala bonds'The Reserve Bank of India (RBI) permitted multilateral and regional financial institutions to invest in rupee-denominated bonds.

“In order to provide more choices of investors to Indian entities issuing rupee-denominated bonds abroad, it has been decided to also permit multilateral and regional financial institutions where India is a member country, to invest in these rupee denominated bonds,” the RBI said in a notification.

The rupee-denominated bonds, which are often called “masala bonds”, were proposed in the first bi-monthly monetary policy of the RBI for 2015-16. At that time, the central bank had fixed a minimum tenure of of five years, with redemption in rupees.

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