The Insurance Regulatory and Development Authority of India (Irdai) has allowed insurers to invest in the ₹25,000 crore onshore rupee bonds issued by the New Development Bank (NDB) as part of their “approved investments”.
The bonds will have to comply with Government of India norms, while any public issue will require approval from the Securities and Exchange Board of India (Sebi), Irdai said. Insurers will also have to comply with Section 27E of the Insurance Act, 1938, which prohibits the direct or indirect investment of policyholders’ funds outside India.
The NDB, the multilateral lender set up by the BRICS countries, had approached Irdai to allow insurers to invest in its Maharajah INR Bonds. The bank plans to raise up to ₹25,000 crore through these bonds over five years. The proceeds will be used for general corporate purposes, including financing and onward lending for sustainable development, infrastructure, green and social projects in India.
Irdai said the bonds must meet the rating criteria prescribed for “approved investments” under its investment regulations. Where Sebi exempts the bonds from the requirement of a rating from Sebi-registered rating agencies based on ratings assigned by international agencies, the equivalent rating will apply.
The regulator also said investments in the bonds will qualify as “infrastructure investments” if the proceeds are invested in infrastructure subsectors notified under the Harmonised Master List issued by the Ministry of Finance.