Take advantage of surety bonds, Irdai Chairman to stakeholders in infra space
Irdai Chairman Debasish Panda on Tuesday urged stakeholders in the infrastructure sector to take advantage offered by surety bonds, which complement bank guarantees needed for large scale funding. Surety bond is a type of insurance policy protecting parties involved in a transaction or contract from potential financial losses due to a breach of contract or other types of non-performance.
He was speaking at a roundtable organised by Confederation of Indian Industry (CII) and The Infravision Foundation (TIF) on the financing of infrastructure projects in the country as part of the massive push to the sector by the government by allocating Rs 10 lakh crore towards it in the Union Budget 2022-23.
The chairman of Insurance Regulatory and Development Authority of India (Irdai) pointed out that India is expected to spend approx Rs 100 lakh crore on infrastructure through the National Infrastructure Pipeline in the next five years.
This requires bank guarantees of approximately Rs 90 lakh crore in the next five years, which banks currently do not have capacity for, a CII press release quoted Panda as saying.
