The Reserve Bank of India (RBI) on Thursday permitted multilateral and regional financial institutions to invest in rupee - denominated bonds.
"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, " the RBI said in a notification.
The rupee - denominated bonds, which are often called "masala bonds", were proposed in the first bi - monthly monetary policy of the RBI for 2015 - 16.
At that time, the central bank had fixed a minimum tenure of of five years, with redemption in rupees.
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