Q. Consider the following statements about Masala Bonds:
1.They are rupee-denominated bonds issued outside India by Indian entities.
2.The currency exchange risk is borne by the issuer of the bond.
3.Both the government and private entities can issue Masala Bonds.
How many of the statements given above are correct?
Answer: B
Notes:
Explanation:
- Statement 1: Correct – Masala Bonds are rupee-denominated bonds issued overseas by Indian entities.
- Statement 2: Incorrect – The currency risk is borne by the investor, not the issuer.
- Statement 3: Correct – Both government and private entities are eligible to issue Masala Bonds, subject to applicable regulations.
Source- OI
