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.

The International Finance Corporation, which offers these bonds, is an arm of the World Bank.

• This statement is correct. The IFC or International Finance Corporation is the private sector investment arm of the World Bank Group.

They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.

• This statement is correct. IFC Masala bonds are Indian rupee denominated bonds (not dollar, euro etc.) aimed at channelizing overseas funds into productive investments across public and private sectors in India.

About IFC Masala Bonds

1. Definition: Masala bonds are rupee-denominated bonds issued outside India but denominated in Indian Rupees.
2. Term Origin: The term "Masala" is a Hindi word meaning spices, used by the IFC to evoke the culture and cuisine of India.
3. Currency Risk: Unlike dollar-denominated bonds, where the borrower bears the currency risk, Masala bonds shift this risk to the investors.
4. First Issuance: The first Masala bond was issued by the World Bank-backed IFC in November 2014, raising 1,000 crore rupees to fund infrastructure projects in India.
5. Green Masala Bonds: In August 2015, the IFC issued its first Green Masala Bond, raising 3.15 billion rupees for private sector investments in climate change initiatives in India.
6. Listing: These bonds were listed on the London Stock Exchange.
7. Total Issuance: As of the available information, the IFC had issued Masala bonds totaling 99 billion rupees in offshore issuances.
8. Purpose: These bonds support private sector investment in India.
9. Significance: The issuance of Masala bonds by the IFC has been crucial in the internationalization of the Indian rupee and attracting international investors to Indian markets​​​​​​​​.