DMPQ :What are masala bonds? Explain their significance (ECONOMY)

Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency The term was used by the International Finance Corporation (IFC) to evoke the culture and cuisine of India Unlike dollar bonds, where the borrower takes the currency risk, masala bond makes the investors bear the risk The first Masala bond was issued by the World Bank-backed IFC in November 2014

Benefits:

  1. Help companies in the diversification of source of funding.
  2. Help to build confidence of investor in the country and its currency.
  3. Provide security to the borrower from exchange rate volatility.
  4. Withholding tax has been reduced from 20% to 5% making it more attractive avenue.
  5. Masala bonds are intended to further deepen market development, enhance participation, facilitate greater market liquidity and improve communication.

 

 

 

MPSC Notes brings Prelims and Mains programs for MPSC Prelims and MPSC Mains Exam preparation. Various Programs initiated by MPSC Notes are as follows:- For any doubt, Just leave us a Chat or Fill us a querry––

Leave a Comment

Hope we have satisfied your need for MPSC Prelims and Mains Preparation

Kindly review us to serve even better


MPSC Mains Test Series 2019

20 Quality mock tests and GS Mains Notes

Mains Test Series and Notes

Mains Printed Notes (With COD)


MPSC Prelims Test Series 2019

24 Quality mock tests and GS Prelims Notes

Prelims Test Series and Notes

Prelims Printed Notes (With COD)

[jetpack_subscription_form title=”Subscribe to MPSC Notes” subscribe_text=”Never Miss any MPSC important update!” subscribe_button=”Sign Me Up” show_subscribers_total=”1″]