Insurance companies have been believed to be the largest source of funds for non-banking financial companies (NBFCs) as compared to scheduled commercial banks (SCBs), which were earlier their major source of investments as per the Financial Stability Report (FSR). Recently there has been almost a 126 per cent jump in investments by insurance companies in NBFCs as of March 2015, compared with investments as of March 2012.
Earlier, SCBs were the major source of funds for NBFCs, followed by insurance companies and asset management companies. As of March 2014, Rs 2.91 lakh crore was raised from SCBs, while Rs 96,500 crore was raised from insurers. Hence, from insurers, there is a 82 per cent rise in investments in NBFCs compared with a year ago.
The report showed that insurance companies were one of the major sources of fund raising for banks, with four per cent of total assets raised from insurers.
