Govt considers giving financial creditor status to insurers issuing surety bond during resolution
To make surety bond business more attractive, the government is looking at making relevant changes in the Insolvency and Bankruptcy Code (IBC) to consider insurers as financial creditor in case of default of infra projects. The surety bond issued by a general insurance company is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).

Insurers may get fin creditor status
The surety is a company that provides the financial guarantee to the obligee (usually a government entity) that the principal (business owner) will fulfil their obligations. According to sources, the Ministry of Corporate Affairs is looking into concerns raised by the insurers that they should have recourse to recovery on par with the banks as forwarded by the Department of Financial Services under the finance ministry.
 

Insurers face challenges in surety insurance contracts
Chennai: The government had proposed the introduction of Surety Insurance Contracts (SICs) to replace bank guarantees for businesses and projects. However, higher insolvency margin, cap on the share of Gross Written Premium (GWP) are some of the challenges insurers face in providing SICs.

India set to be reinsurance hub, but it’s slow progress
Insurance regulator IRDAI is pushing for reforms to make India a reinsurance hub, but achieving this goal requires more comprehensive changes, including Order of Preferences and taxation. While progress has been made, the pace of reforms remains debatable. 

Why your need for life insurance is much more than you think
Your monthly income helps you to meet regular expenses such as groceries, household utility bills, children’s school fees and even an annual family vacation.

LIC policy: Invest Rs 252 per day and get Rs 54 lakh at maturity; know eligibility, features, benefits
LIC Jeevan Labh offers both insurance and savings advantages to policyholders. Additionally, this savings program provides bonuses that raise the final returns to which a client is entitled. This LIC policy looks after your family's financial needs while you are away in addition to giving you a future safety net for money.  

LIC to challenge Rs 290 cr GST bill issued by Bihar tax authority
Source Credit: Aathira Varier, Business Standard

Mumbai: The Life Insurance Corporation of India (LIC) plans to lodge an appeal with the GST Appellate Tribunal over a Goods and Services Tax (GST) bill exceeding Rs 290 crore, issued by the Bihar tax authority.

ICICI Lombard appoints Sanjeev Mantri as new MD & CEO
ICICI Lombard General Insurance has announced the appointment of Sanjeev Mantri as the new managing director and CEO. The decision was approved by the company's board and will come into effect from December 1, 2023, or upon approval from the Insurance Regulatory and Development Authority of India (IRDAI), whichever is later.

PPF, bank FDs or Post Office deposits: Which investment option offers best returns?
As interest rates in India surge, fixed-income investments like bank FDs and Senior Citizens Savings Scheme gain appeal. Despite the current high rates, they offer attractive returns. For example, Senior Citizens Savings Scheme yields 8.2%, bank FDs offer up to 7.75%, and post office deposits provide up to 7.5% annually. Even the Public Provident Fund (PPF) offers a 7.1% interest rate. Large banks like HDFC, SBI, and PNB offer competitive rates on FDs as well. The government is set to revise interest rates on these schemes at the end of September. According to experts, based on G-Sec yields and inflation projections, the rates on small savings schemes are likely to remain stable.

Deadline to add nominees for MFs, demat accounts ends on Sept 30
New Delhi: All individual demat account holders and mutual fund investors have time till September 30, to nominate a beneficiary or opt out of it by submitting a declaration form, failing which their demat accounts and folios will be frozen, and they will not be able to redeem their investments. This mandate applies to both new as well as existing investors, according to the Securities and Exchange Board of India (Sebi). The move is aimed at helping investors to secure their assets and pass them on to their legal heirs. “This will ensure smooth and hassle-free transfer of securities to the legal heirs of the investors in case of any unfortunate event,” Tejas Khoday, co-founder and CEO at FYERS, said.

MFs hungry for bigger slice of banking pie amid growing investor inflows
Source Credit: Abhishek Kumar, Business Standard

Mumbai: Amid growing investor inflows, mutual funds (MFs) are eyeing a larger slice of the banking sector.

‘There’s opportunity for strong earnings growth for many years’
New Delhi : Domestic markets are not far ahead of fundamentals, and there is opportunity for strong earnings growth for several years, Nirav Sheth, chief executive officer, institutional equities at Emkay Global Financial Services Ltd, said in an interview. Barring consumer staples and commodities, he is positive about most sectors including banks, but with varying levels of confidence. Edited excerpts:

Trifecta Capital raises 3rd venture debt fund
Mumbai: Trifecta Capital has hit the final close of its third debt fund at ₹1,777 crore (around $213 million), Rahul Khanna, co-founder and managing partner, Trifecta, said

FPIs outflow in equities crosses Rs 10,000 cr mark in September on rising US interest rates
Foreign Portfolio Investors (FPIs) have pulled out over Rs 10,000 crore from Indian equities in the first three weeks of September, primarily due to rising US interest rates, recessionary fears, and overvalued domestic stocks. Before the outflow, FPIs were incessantly buying Indian equities in the last six months from March to August and brought in Rs 1.74 lakh crore during the period. Mayank Mehra, smallcase, manager and principal partner at Craving Alpha,believes that strong economic growth prospects, attractive valuations, and government reforms could support foreign investment flows in the next month.

Investors want Bloomberg Barclays to bond with India
Mumbai: Top US funds have urged managers of the Bloomberg Barclays Emerging Markets bond index to advance a scheduled review to early October so that a decision on India, now featuring on the competing JP Morgan gauge, can be brought forward by a quarter to give bulge-bracket investors tracking the benchmark an option to incrementally buy about $25 billion of bonds issued by one of the least indebted major economies.
 

Bond inflows: Get ready for a trilemma re-tweak
India’s answer to the Impossible Trinity constitutes a peculiarly fine balance. In theory, we cannot have capital flowing freely in and out, control of the rupee’s exchange rate, and also full autonomy over monetary policy. It’s an economic trilemma. In practice, our post-1991 reform transition spelt a mix of slowly easing capital controls, a decreasingly managed float for the currency, and a central bank increasingly empowered to keep a lid on inflation. Flows from overseas into Indian assets have starred in this story of our calibrated embrace of global capital. News that JPMorgan Chase will include a clutch of government bonds in a key suite of its Government Bond Index for Emerging Markets (GBI-EM) starting in mid-2024, with their weightage likely to rise over 10 months to 10% (a la China), signals the opening of another sluice gate. As with other such indices (like Bloomberg Barclays and FTSE Russell), the GBI-EM guides the allocatory calls of major institutional investors that invest in sovereign debt. By most estimates, next year’s inclusion will draw at least an annual $20 billion extra into government paper. With domestic savings in a slump, exports flagging and import bills looking heavy, that’s clearly good news. We need all the inflows we can get.

JP Morgan adds Indian bonds to its global index

New Delhi:  In a significant move that will set the stage for billions of dollars of foreign fund flows to India, global financial firm JP Morgan has decided to include Indian government bonds into its widely tracked emerging market debt index. 

Vedanta Resources' bond restructuring plan faces resistance from investors seeking better terms

Mumbai: Vedanta Resources' (VRL) bond restructuring plan has met with some resistance from investors seeking better terms. The proposed plan suggests making a 50% upfront payment for the $1 billion January 2024 bond, a 15% payment for the August 2024 bond, and a 10% upfront payment for the March 2025 bonds, with the remaining amounts to be restructured.