IRDAI enables insurer investment in NDB Maharajah INR Bonds as approved instruments
The Insurance Regulatory and Development Authority of India (IRDAI) has, through Circular No. Ref: IRDAI/F&I/CIR/INV/MISC/113/8/2026 dated 27th August, 2026, formally recognised “Onshore Rupee Bonds” issued by the New Development Bank (NDB), including its Maharajah INR Bonds, as part of the “approved investments” universe for insurers, subject to specified regulatory safeguards.
This move follows a direct representation from NDB requesting that insurers be permitted to participate in its Maharajah INR Bond issuances. NDB intends to mobilise INR 25,000 Crores over a period of five years and channel the proceeds towards general corporate purposes as well as financing and onward lending for sustainable development, sustainable infrastructure, and green and social projects in India.
IRDAI has clarified the legal footing of these instruments, set out the conditions under which insurers may invest, linked the treatment of such bonds to infrastructure classification where relevant, and prescribed distinct category codes for reporting under the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024.
Regulatory backdrop for insurer investments in NDB Onshore Rupee Bonds
Recognition as “Securities” under existing law
IRDAI records that NDB’s proposed onshore rupee bond issuances fall within the definition of “Securities” under the Securities Contracts (Regulation) Act, 1956. This legal characterisation is important because insurers are generally permitted to invest only in instruments that are recognised as securities under applicable law and are aligned with the investment norms prescribed by IRDAI.
Linkage with IRDAI investment regulations
The circular is expressly issued with reference to the investment framework contained in the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, particularly Schedule III, which lays down:
- The classification of “Approved Investments” and “Other Investments”
- Rating requirements and prudential norms
- Specific clause-based powers for IRDAI to recognise securities within the approved investment category
IRDAI cites clause 12(6) of Schedule III of these Regulations as the enabling provision under which this circular has been issued.
Purpose and utilisation of NDB Maharajah INR Bonds
NDB has proposed a bond programme to raise INR 25,000 Crores over a five-year horizon through its Maharajah INR Bonds (Onshore Rupee Bonds). According to the representation noted by IRDAI, NDB intends to apply the proceeds for:
- General corporate purposes; and
- Financing or onward lending for:
- Sustainable development initiatives
- Sustainable infrastructure
- Green projects
- Social projects within India
By allowing insurers to invest in these bonds as “approved investments”, IRDAI is effectively widening the spectrum of eligible assets available for life and general insurers, while ensuring alignment with both domestic regulatory requirements and the stated sustainability objectives of NDB’s issuances.
IRDAI permission: scope and conditions
IRDAI has explicitly granted permission for insurers to treat investments in Onshore Rupee Bonds issued by NDB as part of ‘approved investments’, but only if several conditions are fulfilled.
1. Adherence to Government of India norms
IRDAI mandates that these bonds will remain subject to any norms or conditions that may be specified by the Government of India. Insurers must therefore:
- Track any relevant notifications, guidelines, or directions issued by the Central Government concerning such onshore rupee bonds or multilateral development bank issuances; and
- Ensure their investment decisions remain compliant with those norms at all times.
Note: The circular does not itself create separate Government of India conditions; it simply makes IRDAI’s permission contingent on compliance with any such norms, present or future.