The Reserve Bank of India (RBI) changed the rules pertaining to the calculation of the foreign investment limit in so-called masala bonds, potentially opening up space for Indian companies to sell more such securities. Starting 3rd  October, 2017 masala bonds, or rupee-denominated bonds sold overseas, will not be part of the investment limit for foreign portfolio investors (FPIs) in corporate bonds and will instead be included under external commercial borrowings (ECB), the RBI notification stated. This decision has been taken in consultation with the government, the central bank added. Eligible Indian entities that want to sell these bonds can approach RBI’s foreign exchange department, the notification said.

October 8th, 2017