MUMBAI, Jan 16 (Reuters) – The Insurance coverage Regulatory and Improvement Authority of India has mentioned insurers will probably be allowed to categorise their sovereign inexperienced bond purchases as infrastructure investments.
The regulator, in a round dated Jan. 13, mentioned the transfer was made with the target of “de-concentration and diversification” of insurers’ infrastructure portfolios in addition to “from the angle of participation in environmental, social and governance (ESG) initiatives.”
Insurance coverage companies had requested for clarification on how they might classify investments made in these inexperienced bonds, that are being issued for the primary time, mentioned merchants.
India goals to lift 160 billion rupees ($1.96 billion) by way of the problem of its first-ever sovereign inexperienced bonds this monetary 12 months. The Reserve Financial institution of India will public sale 5- and 10-year inexperienced bonds price 40 billion rupees every on Jan. 25 and on Feb. 9.
The investments in inexperienced bonds can qualify in the direction of statutory liquidity ratio (SLR) – the minimal share of deposits industrial banks are required to spend money on liquid property, resembling authorities bonds.
Finance Minister Nirmala Sitharaman introduced the plan to concern sovereign inexperienced bonds within the 2022-23 price range as Asia’s third-largest economic system makes an attempt to faucet the home debt market to finance inexperienced infrastructure initiatives.
($1 = 81.5600 Indian rupees)
Reporting by Bhakti Tambe; Modifying by Janane Venkatraman
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