Irdai opens NDB’s Maharajah INR bonds to insurers
In a circular dated August 27, the regulator said that it had received representation from New Development Bank to permit Insurers to invest in Maharajah INR Bonds. NDB plans to use the proceeds for general corporate purposes, including financing or onward lending to sustainable development, sustainable infrastructure, green and social projects in India.
IRDAI said the bonds can form part of insurers’ approved investments, and will have to meet the rating criteria for approved investments.
On Thursday, investor appetite for Indian government bonds dwindled amidst fears of increased supply and concerns over RBI’s liquidity stance. The results from the treasury bill auction reflected weak demand, driving yields upward. Speculation is building that the Reserve Bank of India may take steps to curtail excess liquidity, preparing for possible policy adjustments as inflationary pressures rise. Market analysts predict interest rate hikes within the next year.
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The regulator has also provided separate category codes for the investments where onshore rupee bonds issued by NDB will carry the category code EORB, while infrastructure approved NDB bonds will carry IORB.
If proceeds from the bond issuance are invested in infrastructure, investments in these bonds will qualify as infrastructure investments, IRDAI said.
Life insurers are required to invest at least 50% in government securities, state government securities or other approved securities. They are also required to invest at least 15% in infrastructure and social sectors. Investments outside the approved category are subject to separate prudential limits prescribed by IRDAI. IRDAI’s July 2026 amendments have eased some investment norms, including allowing investments in private limited companies, infrastructure SPVs, AIFs and venture funds. – Our Bureau
