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.

Let's analyze each statement about IFC Masala Bonds:

Statement 1: The International Finance Corporation (IFC) is indeed a member of the World Bank Group (WBG). The WBG comprises five organizations: IBRD, IDA, IFC, MIGA, and ICSID. The IFC is often referred to as the World Bank's private sector lending arm. Statement 1 is correct.

Statement 2: Masala Bonds are rupee-denominated bonds issued to overseas investors. They serve as a source of debt financing for both the public and private sectors in India. Statement 2 is correct.

Therefore, both statements are correct.

Sources:

• Oxfam - World Bank’s private sector financing arm doesn’t know
• ICJ - Numbers: World Bank’s lesser-known arm, IFC
• The Guardian - World Bank lending arm IFC sees off lawsuit by Indian fishermen over power plant
• Economic Times - Masala bonds can be new funding source for Indian cos: IFC
• IFC - IFC Issues First Green Masala Bond on London Stock Exchange