Masala Bonds Fail to Take off on High Costs

The Economic Times - - Disruption: -

Mum­bai: Masala bonds, the ru­pee se­cu­ri­ties touted as a re­place­ment for over­seas bor­row­ings for In­dian com­pa­nies, have failed to take off as lack of liq­uid­ity, risk pre­mium and high taxes de­ter bor­row­ers to raise money through this new fund­ing source. Close to seven months af­ter the Re­serve Bank of In­dia (RBI) no­ti­fied the is­suance of th­ese new in­stru­ments, as many as six com­pa­nies have tried but even­tu­ally de­clined to is­sue th­ese bonds, cit­ing high costs.

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