The association views the companies collect premium from the general public, thus, the deposits kept by insurance companies should be treated as normal deposits other than institutional deposits.
As per NRB provision, institutional deposits attract 2 percent less interest compared to normal deposits which is the main reason for the companies to file the request.
Previously, the association also met NRB Governor Mahaprasad Adhikari to submit the same demand.
Life insurance companies invested Rs 497.72 billion by the end of the first quarter of the current FY. Out of it, 77.20 percent has been kept as fixed deposits with various BFIs. The companies invested 67.28 percent of the total percentage with commercial banks, 8.66 percent with development banks, 1.10 percent with finance companies and 0.05 percent with Nepal Infrastructure Bank.
