IRDAI Permits Insurers to Invest in NDB’s Rs 25,000-Crore Maharajah Bonds
IRDAI: Regulator Adds New Development Bank’s Onshore Rupee Bonds to List of Approved Investments, Subject to Rating and SEBI Conditions
IRDAI has permitted insurers to invest in NDB’s ₹25,000-crore Maharajah Bonds, opening a new avenue for insurance-sector investments.
New Delhi – IRDAI: The Insurance Regulatory and Development Authority of India (IRDAI) on August 27 permitted insurers to invest in “Maharajah” onshore rupee bonds to be issued by the New Development Bank (NDB), according to the regulator’s circular.
According to the circular, the Authority acted on a representation received from the New Development Bank seeking permission for insurers to invest in the proposed bonds. NDB is planning to raise INR 25,000 crore over a five-year period through the issuance.
The circular states that NDB intends to use the proceeds from the bond issuances for general corporate purposes, including financing and onward lending to sustainable development, sustainable infrastructure, green, and social projects in India.
The bonds are classified as onshore rupee bonds, also referred to as “Maharajah” bonds. Per the circular, the proposed issuances fall under the definition of “securities” under the Securities Contracts (Regulation) Act, 1956.
IRDAI: Conditions Attached to Approved Investment Status
IRDAI has classified investments in these bonds as part of “approved investments” for insurers, subject to five conditions laid out in the circular. The bonds will be governed by any norms prescribed by the Government of India, and the public issue of the bonds must be duly approved by the Securities and Exchange Board of India (SEBI). Insurers investing in the bonds are required to comply with Section 27E of the Insurance Act, 1938.
The bonds must also meet the rating criteria for “approved investments” specified under Schedule III of the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, as amended from time to time, though where SEBI exempts the requirement for a rating from SEBI-registered rating agencies on account of a rating obtained from international rating agencies, an equivalent rating will apply. Additionally, if the proceeds from the bond issuances are deployed in “infrastructure sub-sectors” notified under the Harmonized Master List issued periodically by the Ministry of Finance, the investments will qualify as “infrastructure investments.”
IRDAI: New Instrument Category Codes Introduced
The circular introduces four category codes for insurers to classify these instruments in their investment records:
IRDAI: Issued Under Schedule III of 2024 Investment Regulations
IRDAI stated that the circular has been issued in line with clause 12(6) of Schedule III of the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, which governs the classification and treatment of approved investments for insurers operating in India. The circular carries reference number IRDAI/F&I/CIR/INV/MISC/113/8/2026 and is dated August 27, 2026. It was issued by IRDAI’s Finance & Investment department, headquartered at Survey No. 115/1, Financial District, Nanakramguda, Hyderabad, and was addressed to all insurers operating in the country. The circular was signed by Ammu Venkataramana, General Manager, IRDAI.
The New Development Bank, headquartered in Shanghai, was established by Brazil, Russia, India, China and South Africa (BRICS) to mobilise resources for infrastructure and sustainable development projects in member and other emerging economies. With this circular, NDB’s onshore rupee bonds join the list of instruments available to Indian insurers under the approved investments framework, subject to the conditions specified.
Insurers will be required to factor in the new category codes — EORB, IORB, OORB and IOOB — while classifying their holdings in these bonds for regulatory reporting purposes going forward, in accordance with the norms set out under Schedule III of the 2024 regulations.
Schedule III of the 2024 regulations lays down the broader framework within which insurers assess and record their investments, covering asset classification, rating benchmarks and periodic disclosure requirements. Clause 12(6) specifically deals with the Authority’s power to notify additional instruments or issuers as eligible for approved investment status through circulars of this kind, allowing IRDAI to expand the universe of permitted securities without amending the principal regulations each time.
This circular is the latest instance of that provision being invoked, following similar notifications issued for other multilateral and quasi-sovereign bond issuances in the past. Insurers are expected to update their internal investment policies and compliance checklists to reflect the new codes once the bond issuance is formally launched by NDB and approved by SEBI.
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