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IRDAI grants country’s insurers permission to invest in IDFs of NBFCs

Written by Adam Cadle
15/01/2024

India’s insurers have been granted permission by the country’s regulator, IRDAI, to invest in infrastructure debt funds (IDF) of non-banking finance companies (NBFCs).

The latest decision by IRDAI follows a recent review of the regulatory framework for IDF-NBFCs by the Reserve Bank of India. Previously, insurers were permitted to invest in IDFs backed by the central government on a case-by-case basis. IRDAI stated that the new rules are designed to promote investment in infrastructure.

The latest permission is contingent upon the UDF-NBFC being registered with the RBI and possessing a minimum maturity of five years. Furthermore, these investments should carry a minimum credit rating of AA.

Speaking to The Times of India, Venkatakrishnan Srinivasan of Rockfort Fincap LLP, said: "IDF-NBFCs raise funds through various means, such as issuing bonds and loans, and subsequently lend these funds to infrastructure projects across sectors like transportation, energy, telecommunications, and more. They play a crucial role in facilitating the funding required for infrastructure growth and development in India.”


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