RBI allows multilateral FIs to invest in masala bonds

Mumbai: Reserve Bank on Thursday permitted multilateral financial institutions to invest in rupee denominated bonds popularly known as 'masala bonds' issued by Indian entities.

"In order to provide more choices of investors to Indian entities issuing rupee denominated bonds abroad, it has been decided to also permit multilateral and regional financial institutions where India is a member country, to invest in these rupee denominated bonds," said a RBI notification.

Meanwhile, the RBI has withdrawn the instruction regarding submission a fortnightly return on Forward Rate Agreement (FRA) and Interest Rate Swap (IRS) to Monetary Policy Department with a copy to various departments of the central bank.

"In a further step towards rationalization of returns it has been decided to withdraw the said return with immediate effect. The banks are hereby advised to stop sending the hardcopy of the said return to RBI," it said.