Khoka

What is Khoka.?

Khoka, originally a Gujarati word, literally translates into an empty coconut shell. It is the non-convertible section of a partially convertible debenture.
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It is important not here that the non convertible portion can carry a lucrative interest rate (for example, 13.5 per cent). Also, it is really difficult to find it a seller in the debenture market.

Apart from that, in the event it can not be sold at all, the discount rate may climb as high as 40 per cent. The reason behind such dramatic increase in interest rate is to mitigate all the difficulties of holding the khoka that came into being because of the introduction of SILK scheme.

Edited and Updated 15th February 2014

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