Government issues bonds worth Rs10,000 crore to oil PSUs
23 Mar 2009
The government today issued bonds worth Rs10,000 crore to state-run oil marketing companies to compensate them for selling petroleum products at below cost price.
While Indian Oil Corporation will get the highest compensation of Rs5,817.27 crore worth of special bonds, Bharat Petroleum Corporation will receive Rs2,144.32-crore bonds and Hindustan Petroleum Corporation will get bonds worth Rs2,038.41 crore.
The bonds - India Special Bonds, 2026 - will carry an 8 per cent coupon rate, the government said in a statement.
''The investment in the Special Bonds by the banks and insurance companies will not be reckoned as an eligible investment in government securities for their statutory requirements,'' a government release said.
''However, such investment by the insurance companies will be eligible to be reckoned as investment under `other approved securities' category as defined under Insurance Regulatory and Development Authority (Investment) Regulations, 2000. Further, the investment by the provident funds, gratuity funds, superannuation funds, etc. in the Special Bonds will be treated as an eligible investment under the administrative order of the ministry of finance,'' the release said.
The Special Bonds will be transferable and eligible for market ready forward transactions (Repo), the release added.
