MUMBAI, Aug 4 (Reuters) – India’s insurance regulator has allowed insurance companies to classify debt securities of HDFC Ltd under the ‘housing and infrastructure’ category, it said in a notification on Friday.
HDFC Ltd was merged with HDFC Bank (HDBK.NS) on July 1, following which debt securities of the housing financier had been transferred to the bank.
Insurance companies feared they would breach investment limits prescribed for the financial sector after the merger if bonds of HDFC were classified under that segment.
Bonds of HDFC Ltd will be treated as exposure to housing and infrastructure till maturity, the Insurance Regulatory Development Authority (IRDA) clarified.
IRDA has also given insurance companies time till June 30, 2024, to comply with norms for maximum exposure to a single entity in the case of HDFC Bank.
Some insurance companies, which held shares of both HDFC and HDFC Bank, may breach these exposure norms.
Reporting by Ira Dugal; editing by Eileen Soreng
Our Standards: The Thomson Reuters Trust Principles.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.