The government has approved the issue of the first tranche
of oil bonds worth Rs14,150 crore out of total of Rs28,300
crore to state-owned oil marketing companies. Finance
minister P Chidambaram said the oil bonds, meant to
compensate them for the losses on retail sales of petrol
and diesel, will be issued within this month.
however, ruled out statutory liquidity ratio (SLR) status
for oil bonds. This means that banks will not be able
to subscribe to the bonds as part of their SLR requirements
- banks are allowed to invest 25 per cent of their liabilities
in approved securities among other things.
finance minister had last month said that the bonds
would not qualify as bonds.
oil bonds will be issued within this month and they
will not get SLR status," Chidambaram told reporters.
government has not yet concluded its borrowing programme
for the year and allowing banks to invest in oil bonds
would only help to discourage them from buying government
year, the oil companies were issued bonds worth Rs11,500
crore of three, six and nine year maturities with coupon
rates of 7.33 per cent, 7.47 per cent and 7.61 per cent,