IOC enters call money market

New Delhi: The Indian Oil Corporation (IOC) has entered the call money market in order to raise funds of around Rs2,000 crore to meet its working capital requirements. The company is using the Rs2,320-crore oil bonds issued to it by the government recently as collateral.

The company would be using the Collateralised Borrowing and Lending Obligation (CBLO) instrument offered by the Clearing Corporation of India, which would help it to reduce borrowing costs. IOC would be trading about Rs200-300 crore daily by using the CBLO instrument.

CBLO instrument enables corporates to become members and access this platform by pledging government securities against their borrowing limits and lending it at the call money market rate.

It requires members to open an account with CCIL for depositing securities, which are offered as collateral or margin for borrowing and lending of funds.

The government had recently issued special government bonds amounting to Rs5,762.85 crore to oil companies in order to liquidate the balance payable to these firms from the Oil Pool Account.