India’s pension managers want to bend the bond rules to pursue their retirement savings

According to the familiar people in this case, Indian pension managers have asked the industry regulators to reduce the rules of the company’s bond.Retirement funds recently asked the pension fund regulator and development authority to rest in the purchase of corporate bonds that were adults in less than three years, demanding refuse to discuss private matters. They only asked for permission to buy a rating company’s loan by a credit evaluation, the people said.

The request was made by the Association of the NPS Interdition, Industry Body at a recent meeting. Since the target of managers to generate maximum income on the rising pond of domestic savings, they underline the growing need of flexibility. In the last five years, the property has tripled, which has increased due to India’s economic growth and the increasing participation of investors in the economic system.

According to the pension regulator, the March 225 circular is currently investing in the matching corporate bond in less than three years.

According to statistics on the platform website, the property in the national pension system with the national pension system has tripled up to Rs 14.4 trillion ($ 168 billion). This has led to the large amount of government bonds, which led the Central Bank to submit a track of the land owned by the universal loan area in 223.

The share of corporate bonds, however, fell 8.7.7 per cent in the year ended March 224, with 5.2.5% of the previous year.

A pension fund regulator and a spokesman for the development authority did not respond to the comment request.

The request to relax 10% of the maturity customs will give another investment opportunity for the growing industry. Bonds issued by financial sector companies meet dual-rating requirements, but manufacturing companies often choose single ratings to save costs, limiting the ability to invest pension funds.

Of course, the investment in documents rated by just one agency can potentially mild the credit quality of the retirement fund’s portfolio. Meanwhile, increased investment in low-maturity bonds can create challenges for retirement funds to deploy these securities at interest rates.

For the past few months, long -term investors like insurance funds have demanded more access to Indian regulators in the country’s financial market. Some of these requests, such as the permission to expand the hedging tools, and the introduction of new types of debt securities have been reflected on the rising height of these players.