Economics · Economy
Based on the External Commercial Borrowings (ECB) framework, what is a primary distinguishing feature of 'Masala Bonds' issued by Indian entities?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The interest rate is strictly capped at 500 basis points below the prevailing yield of Government of India securities.
- 2They can be issued by any Indian entity without any minimum maturity period or end-use restrictions.
- 3They are rupee-denominated bonds issued in offshore markets where the currency risk is borne by the investor.✓
- 4They are issued in foreign currency like USD but interest and principal are repaid in Indian Rupees.
Correct answer
They are rupee-denominated bonds issued in offshore markets where the currency risk is borne by the investor.
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