The credit policy has fixed the maximum all inclusive cost for masala bonds. CARE Ratings has put together some information on companies which have borrowed such funds and the cost incurred as interest on them. it will be interesting to see as to how firms react to this new norm as they compare these rates with domestic borrowing costs.
The RBI came up with amendments in the framework for issuance of rupee denominated bonds overseas, called as masala bonds on the provisions of available routes of borrowing, recognised lender and all-in-cost among others. The new revisions, which are applicable currently, are as follows;