5 days ago
India Regulator Allows Insurers to Invest in NDB Rupee Bonds
India’s insurance regulator has allowed insurance companies to buy certain bonds from the New Development Bank.
The bonds could raise up to ₹25,000 crore.
They will be issued in Indian rupees within India.
The money will help fund projects such as infrastructure and environmentally friendly development.
The bonds must follow Indian government rules.
A public sale would also need approval from the securities regulator.
Insurance companies must follow rules protecting policyholders’ money.
Some investments may count as infrastructure investments if the money is used for officially recognized infrastructure projects.
The Insurance Regulatory and Development Authority of India approved insurers’ investment in New Development Bank’s ₹25,000-crore onshore rupee bonds.
The bonds must comply with Government of India norms and meet approved-investment rating requirements.
Any public issue of the bonds will require approval from the Securities and Exchange Board of India.
Insurers must comply with Section 27E of the Insurance Act, 1938, which restricts investing policyholders’ funds outside India.
New Development Bank plans to raise up to ₹25,000 crore over five years for financing and onward lending for infrastructure, green, social and sustainable-development projects in India.
- Who
- The Insurance Regulatory and Development Authority of India, insurers and the New Development Bank.
- What
- Insurers have been allowed to invest in the New Development Bank’s Maharajah INR Bonds as approved investments.
- Where
- The bonds are onshore rupee bonds issued in India, with proceeds intended for projects in India.
- When
- The article gives no decision date; the New Development Bank plans to raise the funds over five years.
- Why
- The New Development Bank wants to raise funds for general corporate purposes, including financing and onward lending for sustainable development, infrastructure, green and social projects.
Key facts
- Bond issuer
- New Development Bank
- Planned fundraising
- Up to ₹25,000 crore over five years
- Eligible investors
- Insurance companies
- Bond type
- Onshore rupee bonds, known as Maharajah INR Bonds
- Public issue requirement
- Approval from the Securities and Exchange Board of India
- Regulatory restriction
- Insurers must comply with Section 27E of the Insurance Act, 1938
- Infrastructure classification
- Investments qualify if proceeds fund infrastructure subsectors on the Ministry of Finance’s Harmonised Master List
Sources
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