IRDAI Permits Insurers to Invest in NDB Maharajah INR Bonds as Approved Investments

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Summary: The Insurance Regulatory and Development Authority of India (IRDAI), through Circular No. Ref: IRDAI/F&I/CIR/INV/MISC/113/8/2026 dated 27th August, 2026, has permitted insurers to invest in “Onshore Rupee Bonds” issued by the New Development Bank (NDB) as part of “approved investments”, subject to specified conditions. The circular has been issued pursuant to a representation received from NDB seeking permission for insurers to invest in its Maharajah INR Bonds (Onshore Rupee Bonds). NDB proposes to raise INR 25,000 crores over a five-year period, with the proceeds proposed to be used for general corporate purposes and for financing or onward lending towards sustainable development, sustainable infrastructure, and green and social projects in India.

IRDAI records that the proposed onshore rupee bond issuances are covered within the definition of “Securities” under the Securities Contracts (Regulation) Act, 1956. The regulatory framework governing insurers’ investments also includes IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, particularly its investment provisions contained in Schedule III.

The permission is subject to several safeguards. The bonds will be governed by norms, if any, laid down by the Government of India, while any public issue of the bonds must be duly approved by SEBI. Insurers must also comply with Section 27E of the Insurance Act, 1938, which contains restrictions concerning insurers’ investment of policyholder funds outside India.

The bonds must satisfy the rating criteria applicable to “Approved Investments” under Schedule III of the 2024 Regulations, as amended from time to time. Where SEBI exempts the rating requirement from SEBI-registered rating agencies because an equivalent rating has been obtained from international rating agencies, the equivalent rating will apply.

The circular further provides that where the proceeds of the bond issuance are invested in infrastructure sub-sectors notified under the Harmonized Master List issued by the Ministry of Finance from time to time, investments in those bonds will qualify as “infrastructure investments”. Thus, the treatment of the investment can differ depending on whether the proceeds satisfy the stated infrastructure criterion.

IRDAI has prescribed separate category codes for the instruments. Onshore Rupee Bonds issued by NDB are assigned the approved-investment code “EORB”, while those qualifying as infrastructure-approved investments are assigned “IORB”. For investments falling under “Other Investments”, the corresponding codes are “OORB” for Onshore Rupee Bonds issued by NDB and “IOOB” for NDB Onshore Rupee Bonds classified as infrastructure-other investments.

Accordingly, the circular expands the investment avenues available to insurers by specifically permitting NDB’s Onshore Rupee Bonds within the approved-investment framework, while retaining regulatory safeguards relating to Government of India norms, SEBI approval, Section 27E compliance, applicable rating requirements and infrastructure classification. The circular states that it is issued in line with clause 12(6) of Schedule III of the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024.

Insurance Regulatory and Development Authority of India

Circular No. Ref: IRDAI/F&I/CIR/INV/MISC/113/8/2026 | Dated: 27^th August, 2026

All Insurers,

Sub: Investment in Maharajah INR Bonds issued by New Development Bank (NDB).

1. The Authority is in receipt of representation from New Development Bank to permit Insurers to invest in Maharajah INR Bonds (Onshore Rupee Bonds) which are being issued by them. NDB proposes to raise INR 25,000 Crores over a five-year period. The proceeds from the NDB Maharajah INR bonds are proposed to be utilized by NDB towards general corporate purposes for financing/onward lending to sustainable development, sustainable infrastructure, green, social, projects in India.

2. The proposed onshore rupee bond issuances by NDB are covered under the definition of “Securities” under the Securities Contracts (Regulations) Act,1956.

3. In view of the above and to enable insurers to have more scope for investments, IRDAI hereby permits investments in “Onshore Rupee Bonds” issued by New Development Bank as part of ‘approved investments’ subject to the following:

a. These Bonds will be governed by norms, if any, laid by Government of India;

b. Public Issue of these Bonds shall be duly approved by SEBI;

c. Insurers are required to comply with the provisions of Section 27E of Insurance Act, 1938 while investing in these bonds;

d. Bonds shall fulfil the rating criteria for “Approved Investments” under Schedule III of IRDAI (Actuarial, Finance and Investment functions of insurers) Regulations ,2024 as amended from time to time. Where SEBI exempts the rating requirement from the rating agencies registered with SEBI in view of the rating obtained from International rating agencies, then such equivalent rating will be applicable.

e) If the proceeds of the bond issuances are invested in “infrastructure sub- sectors’ notified under Harmonized Master List issued by the Ministry of Finance from time to time, investments in said bonds shall qualify as “infrastructure investments”.

4. The Category codes for these instruments are:

This circular is issued in line with clause 12(6) of Schedule III of IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024.

Sd./-
(Ammu Venkataramana)
(General Manager)