Kerala Chief Minister Pinarayi Vijayan rang the bell at the London Stock Exchange, opening the Market on Friday 17 May, marking the listing of Masala Bonds sold by Kerala Infrastructure Investment Fund Board (KIIFB), which is a government owned financial institution in Kerala that mobilises funds for infrastructure development from outside the state revenue. This was a part of CM's 13 day trip where he visited France, Netherlands and attended World Reconstruction Conference (WRC4) in Geneva.
In the afternoon on Friday, at a London hotel, the CM launched the Pravasi Chitty Scheme, which is monitored by Kerala State Financial Enterprises (KSFE), which is a savings scheme that provides stable income to Non Residential Indians (NRIS) subscribers in the form of pension when they return back to Kerala.
The idea of Masala Bonds was reportedly put forward by the State Finance Minister Thomas Issac, who also accompanied the CM, in order to raise funds to rebuild infrastructure in Kerala which witnessed the worst floods in 100 years in August 2018. Following the floods, two Dutch water experts were part of the UN's visit to Kerala.
Masala Bonds are bonds issued by an Indian entity in a foreign market in the rupee denomination, rather than the local currency. Masala is an Indian word and it means spices. The term was used by the International Finance Corporation (IFC) to evoke the culture and cuisine of India.Unlike dollar bonds, where the borrower takes the currency risk, masala bond makes the investors bear the risk.