With reference to 'IFC Masala Bonds', sometimes seen in the news, which of the statements given below is/are correct?
- 1.The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
- 2.They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.
Select the correct answer using the code given below.
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Answer: C. Statement 1 is correct: the International Finance Corporation (IFC), which issued the first Masala Bonds, is part of the World Bank Group. Statement 2 is correct: Masala Bonds are rupee-denominated bonds sold abroad, used to raise debt for public and private projects. So both 1 and 2.
Watch for: Students unsure whether IFC belongs to the World Bank Group, or think such bonds must be in dollars.
Why the other options are wrong
- A. Wrong because Masala Bonds are indeed rupee-denominated debt instruments.
- B. Wrong because IFC is a member of the World Bank Group.
- D. Wrong because both statements are correct.
Source to check: IFC press release on Masala Bonds, November 2014 (ifc.org); RBI circular on rupee-denominated bonds overseas, September 2015
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.