Why is it called masala bond?

It is known as Masala bond because the word ‘Masala’ means spices. As the word evokes the cuisine and culture of India, the International Finance Corporation (IFC) decided to use the word Masala Bond. You can read about the Masala Bonds – Benefits, Features & Significance in the given link.

Masala Bonds is one of the ways of raising investments in local currency from foreign investors. These are rupee-denominated bonds. 

Further readings:

1. Electoral Bonds – Introduction, Context, Importance & Significance
2. Types of Bonds – Basics of Bond, General Features and Characteristics