RBI puts restrictions on masala bond issuance

Between Sept 2016 and April this year, Indian firms have raised Rs 33,165 cr through this route

The Reserve Bank of India (RBI) on Wednesday brought in some restrictions on issuance of rupee-denominated bonds, or masala bonds, by harmonising the issuance norms on a par with those for external commercial borrowings (ECBs).

Now, there will also be a cap on how much interest can be paid on these bonds.
 

The central bank said any proposal to issue these bonds will be examined at the RBI’s foreign exchange department. It also put some conditions for masala bonds, which are gaining popularity as a means of raising cheap money. Since these bonds are issued in rupee, the issuer is not