Irdai opens NDB's Maharajah INR bonds to insurers

Mumbai: The Insurance Regulatory and Development Authority of India (Irdai) has permitted insurers to invest in Maharajah INR bonds issued by the New Development Bank (NDB), providing insurers with an additional investment option in rupee-denominated bonds. The NDB aims to raise ₹25,000 crore through these bonds over a five-year period, as announced in a circular dated August 27.

Irdai received representation from the NDB, allowing insurers to invest in these Maharajah INR Bonds. The proceeds from the bonds will be utilized for general corporate purposes, including financing or lending to sustainable development, infrastructure, green, and social projects in India.

Insurers can include these bonds in their approved investments, subject to meeting the rating criteria for such investments. The regulator has assigned separate category codes for onshore rupee bonds issued by NDB, categorized as EORB, and infrastructure-approved NDB bonds as IORB. If bond proceeds are invested in infrastructure, these investments will be considered infrastructure investments for insurers.

Life insurers are obligated to allocate at least 50% of their investments to government securities, state government securities, or other approved securities. Additionally, they must invest at least 15% in infrastructure and social sectors. Investments outside the approved categories are subject to IRDAI's prudential limits. Irdai's July 2026 amendments have eased some investment norms, allowing insurers to invest in private limited companies, infrastructure Special Purpose Vehicles, Alternative Investment Funds, and venture funds.