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.

Both statements are correct because the IFC is a member of the World Bank Group, and Masala Bonds are offshore, rupee-denominated debt instruments used by Indian public and private entities to raise capital while shifting currency risk to investors. Option (b) is the most tempting wrong choice if a candidate fails to recognize the IFC’s specific institutional status as a World Bank affiliate. The core concept tested is the mechanism of External Commercial Borrowings (ECB) and the role of international financial institutions in facilitating domestic debt financing.