New Delhi: Issuance of rupee-denominated masala bonds overseas is a step towards making the Indian currency global, CARE Ratings said on Thursday.
Rupee-denominated bonds issued overseas can become an important instrument from the point of view of Indian companies which can raise such funds from global markets without taking on the currency risk, CARE Ratings said in a note.
"It differs from External Commercial Borrowings (ECBs) as these are issued in rupees and repaid in the same currency. It is a step towards making the rupee a global currency where foreign investors buy such bonds", it said.
Presently the limit of USD 51 billion for foreign investment in corporate debt has been fixed in rupee terms at Rs 2,443.23 billion.
Issuance of rupee-denominated bonds overseas is also within this aggregate limit of foreign investment in corporate debt, it said.
On maturity period of three years for rupee denominated bonds issued overseas so that it is aligned with the maturity for foreign investment in corporate bonds, CARE said the it is a positive move and will lead to more companies raising funds through this route.
"This route can also be used by foreign companies or governments who would like to invest in India by borrowing from overseas markets provided the cost is favourable", it added.