Banks in the country have been allowed to raise money through Masala Bonds.
"In line with the announcement made, with a view to developing the market of rupee-denominated bonds overseas, it has been decided, after consultation with the government, to allow Indian banks within the limit set for foreign investment in corporate bonds (Rs 2,44,323 crore at present) to issue bonds," RBI said in a notification.
Masala bonds are those which are Rupee denominated bonds issued outside India. Such bonds will be offered to foreign investors who are interested in investment in India but without direct exposure.
These bonds are issued to raise funds in the international market. Masala bonds are listed on London Stock Exchange.