With reference to ‘IFC Masala Bonds’, sometimes seen in the news, which of the statements given below is/are correct?
- The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
- They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.
Select the correct answer using the codes given below.
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Explanation
Statement 1 is correct
- In India, the first Masala bond was issued by the World Bank-backed IFC in November 2014, and it raised Rs. 1,000 crore in bonds to fund infrastructure projects in India.
Statement 2 is correct
- Bonds are instruments of debt, typically used by corporations to raise money from investors. Masala Bonds are the rupee-denominated bonds issued to overseas buyers for raising money by the public and private sector.
