Chennai, Aug 19 (IANS): Acceding to the request of International Finance Corporation (IFC), Indian insurance regulator IRDA has allowed Indian insurers to invest in its onshore rupee bonds, said a senior official.

"We have permitted insurance companies to invest in the onshore bonds issued by IFC. We have also permitted insurers to hedge their interest rate risks recently," Insurance Regulatory and Development Authority (IRDA) member Radhakrishnan Nair told IANS.

He said the basic philosophy of IRDA's investment norms, safety, liquidity and returns continue to remain the same.

The IRDA had received a representation from IFC to permit insurers to invest in its onshore rupee bonds.

The IFC is planning to raise $5 billion equivalent fund issuing rupee bonds in India for investments in the country.

The central government has permitted onshore rupee bonds issued by multilateral agencies like Asian Development Bank (ADB) and IFC to be classified as securities under the Securities Contracts (Regulation) Act.

Following that, the IRDA too classified such bonds as approved investments for the Indian insurers.

According to IRDA, the public issue onshore rupee bonds by ADB or IFC should be approved by Securities and Exchange Board of India (SEBI) and be subject to the rating criteria as per its investment regulations.

However if SEBI exempts rating of the bonds by the credit rating agencies registered with it owing to the rating received from international rating agencies then it will be considered as approved investments, said IRDA.

The valuation of these bonds will be similar to other corporate bonds and debentures, IRDA said.