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The IRDAI has relaxed certain rules on investment in infrastructure debt funds (IDFs) of non-banking financial companies (NBFCs) by insurance companies.
To encourage further investments by insurers in the infrastructure sector and to enhance ease of doing business, the requirement of case-to-case approval for an investment in an IDF is done away with.
This follows a decision by the Reserve Bank of India (RBI) to enable IDF-NBFCs to play a greater role in financing the infrastructure sector.
Insurers are allowed to make investments in IDF-NBFCs which will be reckoned as infrastructure investments, subject to the following conditions:
a) the IDF-NBFC is registered with the RBI
b) Debt securities shall have residual tenure of not less than 5 years
c) Minimum credit rating of ‘AA’ or its equivalent by a credit rating agency registered with SEBI to be eligible for approved investments
d) Exposure norms.
