Masala Bonds

  • In March 2026, the Kerala High Court extended till April 6 its stay on any proceedings pursuant to the show cause notice issued to Chief Minister Pinarayi Vijayan by the ED in connection with the KIIFB Masala issue.
  • Masala Bonds are rupee-denominated debt instruments issued by Indian entities in offshore capital markets.
  • Foreign investors bear the entire currency fluctuation risk as the principal and interest are repaid in rupees.
  • This mechanism protects Indian borrowers from the rising costs of debt servicing during rupee depreciation.
  • The bonds are settled in foreign currency at the prevailing exchange rate at the time of settlement.

Regulatory Compliance ....

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