No violation of Foreign Exchange Act at KIIFB, says Kerala Finance Minister

Kochi (Kerala) [India], March 4 : Kerala Finance Minister Thomas Isaac on Wednesday said that there was no violation of the Foreign Exchange Management Act (FEMA) in alleged case of external borrowings of Kerala Infrastructure Investment Fund Board (KIIFB) through Masala Bonds.
"There is absolutely no violation of FEMA as we have received No Objection Certificate (NOC) from Reserve Bank of India (RBI)," said Thomas Isaac while speaking to ANI.
The Finance Minister further said: "There is a guideline that authorizes any body corporate to seek their permission to borrow through Masala bonds. KIIFB is body corporate."
Enforcement Directorate (ED) has registered a case against KIIFB for external borrowings through Masala Bonds without the permission of the union government.
Yesterday, ED sent a notice to KM Abraham, CEO of KIIFB and asked him to appear before its Kochi office on March 5. It also sent a notice to Deputy Managing Director Vikramjit Singh and asked him to appear before it on March 4.
KIIFB was constituted by the state government as a corporate body. In November 2020, it had initiated an investigation into the Masala bonds of the KIIFB, as per the sources.
Recently, Union Finance Minister Nirmala Sitharaman accused the Pinarayi Vijayan-led government of giving all the budget money to KIIFB.