02-16-2008, 06:25 PM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Oil bonds to be granted SLR status</b>
Feb 16, 2008
New Delhi : The Finance Ministry has agreed to give SLR status to oil bonds this fiscal, Petroleum Secretary M S Srinivasan told reporters on Friday
The Finance Ministry has agreed to the Petroleum Ministryâs proposal of granting statutory liquidity ratio (SLR) status to oil bonds, enlarging the investment options for commercial banks to meet the SLR requirement. Under the SLR requirement, banks have to park 25 per cent of deposits in government bonds.
âThe Finance Ministry has agreed to give SLR status to oil bonds this fiscal,â Petroleum Secretary M S Srinivasan told reporters on Friday.
The government is expected to issue oil bonds worth around Rs 40,000 crore to Indian Oil, Bharat Petroleum and Hindustan Petroleum in 2007-08 to compensate them for under- recoveries on sale of fuel on subsidised rates.
Of this, bonds worth about Rs 11,000 crore have already been issued by the Finance Ministry. In 2006-07, oil bonds worth Rs 24,121 crore were issued.
The Petroleum Ministry, while negotiating the terms for the oil bonds, had conveyed to the Finance Ministry that oil companies were facing difficulties in disposing the existing bonds due to their non-SLR status and long tenures. Oil companies were able to sell only a limited number of bonds in the market and that too at a discount, it had said.
While raising the petrol prices by Rs 2 a litre and diesel by Re one a litre on Thursday, the Cabinet Committee on Political Affairs also decided to increase to 56-57 per cent the share of compensation that is to be met through issue of oil bonds for selling the fuel below cost price.
The current level is 42.7 per cent of the under-recoveries. âWe have taken up with the finance ministry for SLR status of old and new oil bonds. We hope for a favourable decision,ââ Mr Srinivasan said. Oil companies had claimed total under-recoveries at Rs 71,808 crore for the financial year 2007-08, and are likely to get Rs 840 crore after the hike in petroleum prices.<!--QuoteEnd--><!--QuoteEEnd-->
Feb 16, 2008
New Delhi : The Finance Ministry has agreed to give SLR status to oil bonds this fiscal, Petroleum Secretary M S Srinivasan told reporters on Friday
The Finance Ministry has agreed to the Petroleum Ministryâs proposal of granting statutory liquidity ratio (SLR) status to oil bonds, enlarging the investment options for commercial banks to meet the SLR requirement. Under the SLR requirement, banks have to park 25 per cent of deposits in government bonds.
âThe Finance Ministry has agreed to give SLR status to oil bonds this fiscal,â Petroleum Secretary M S Srinivasan told reporters on Friday.
The government is expected to issue oil bonds worth around Rs 40,000 crore to Indian Oil, Bharat Petroleum and Hindustan Petroleum in 2007-08 to compensate them for under- recoveries on sale of fuel on subsidised rates.
Of this, bonds worth about Rs 11,000 crore have already been issued by the Finance Ministry. In 2006-07, oil bonds worth Rs 24,121 crore were issued.
The Petroleum Ministry, while negotiating the terms for the oil bonds, had conveyed to the Finance Ministry that oil companies were facing difficulties in disposing the existing bonds due to their non-SLR status and long tenures. Oil companies were able to sell only a limited number of bonds in the market and that too at a discount, it had said.
While raising the petrol prices by Rs 2 a litre and diesel by Re one a litre on Thursday, the Cabinet Committee on Political Affairs also decided to increase to 56-57 per cent the share of compensation that is to be met through issue of oil bonds for selling the fuel below cost price.
The current level is 42.7 per cent of the under-recoveries. âWe have taken up with the finance ministry for SLR status of old and new oil bonds. We hope for a favourable decision,ââ Mr Srinivasan said. Oil companies had claimed total under-recoveries at Rs 71,808 crore for the financial year 2007-08, and are likely to get Rs 840 crore after the hike in petroleum prices.<!--QuoteEnd--><!--QuoteEEnd-->