Masala bonds to be treated as ECB: RBI

On 22nd September 2017, The Reserve Bank of India (RBI) announced that Masala bonds will be treated as External Commercial Borrowings (ECB) from 3rd October 2017. Masala bonds are rupee-denominated overseas bonds. Considering Masala bonds as ECBs will free up more investments by FPIs (Foreign Portfolio Investors). Currently, the limit for investment by FPIs in corporate bonds is Rs.2,44,323 crore. This includes masala bonds of Rs.44,001 crore. RBI has said that from 3rd October 2017, Masala bonds will no longer be a part of the limit for FPI investments in corporate bonds. They will be a part of the ECBs.