A bond is essentially an IOU where an investor loans money to a company or government in exchange for interest payments. Foreign currency convertible bonds (FCCBs) are bonds issued in a foreign currency that can be converted into equity shares of the issuing company. FCCBs allow companies to raise funds at lower costs than regular bonds. The RBI allows Indian companies to issue FCCBs up to $500 million per year without approval. Some companies may buy back FCCBs to reduce debt obligations.