KOCHI: The Reserve Bank of India (RBI) told the High Court that NOC was issued to KIIFB to raise funds from abroad through masala bonds, and the Enforcement Directorate (ED) has the authority to investigate whether there is any violation of foreign exchange rules in the raising of funds.

The explanation came in the petitions filed by former Finance Minister Dr Thomas Isaac and KIIFB officials against the ED probe into the violation of the Foreign Exchange Act (FEMA) in raising and disbursing money through Masala Bond.

Information on how the money collected through Masala Bond has been spent is to be given on a monthly basis in a prescribed form. The application submitted through any bank should be submitted along with the certificate of that bank. Details of refund should also be provided. KIIFB has provided this form and other information, according to the affidavit given by Shalini Pradeep, Assistant General Manager of Reserve Bank Kochi Regional Office.

Apart from Thomas Isaac, KIIFB CEO KM Abraham and Joint Fund Manager Annie Jula Thomas are the petitioners. They had stated that the masala bond was issued with the permission of the RBI. The RBI was made a party to the petitions for an explanation as ED had contended that prima facie there is a violation of FEMA and it should be checked whether the collected money has been invested in the real estate sector as well. The petitions will be heard again next month.