Bank infrastructure bonds will be given infrastructure status soon
Post the Modinomics wave, there is a positive sentiment in all the sectors including the insurance sector. The Life insurance companies are awaiting a nod from the Insurance Regulatory Development Authority (IRDA) to invest in the infrastructure bonds issued by the banks. Currently, the infrastructure bonds have not been given the ‘infra’ status by IRDA and the insurance companies are waiting for it.
Aneesh Srivastava the chief investment officer at IDBI Fortis Life Insurance stated that there has been an ongoing dialogue between the government and the insurance regulator. He further mentioned that the bank infrastructure bonds will be given the infrastructure status soon.
Kunal Shah the fund manager for debt instruments at Kotak Life Insurance explained further about the procedures. He stated that the insurance companies have to invest 15 % of their non-unit linked bonds with the bonds, which have been given the infrastructure status. Shah explained that if the bank infrastructure bonds are given that status, it will provide a captive market for the insurance companies. That will give a positive boost to the insurance sector which had been going through a downward surge in the last few quarters.
Kotak Life Insurance has not invested in any infrastructure bonds issued by the banks. Sanjay Kumar the head of investments at PNB Met Life Insurance assured that once the infra status is granted by the regulator IRDA; the bonds will become more attractive and allow the insurance companies to diversify their portfolio. Kumar mentioned that PNB Met Life Insurance has not invested in infra bonds, and their team is currently evaluating them.
Source- The Financial Express
Aneesh Srivastava, IDBI Fortis Life Insurance, infrastructure bonds, Insurance Regulatory Development Authority, IRDA, Kotak Life Insurance, Modinomics
