Government issues Oil Bonds worth Rs.4971 crore to Indian Oil, BPCL, HPCL

Government of India have announced the issue of fifth tranche of ‘8.40 per cent Oil Marketing Companies’ Government of India Special Bonds, 2026 for Rs.4971 crore (nominal), The Special Bonds are being issued to three Oil Marketing Companies as compensation for under-recoveries on domestic sales of sensitive petroleum products during the current financial year. The fifth tranche of the Special Bonds is being issued at par to Indian Oil Corporation Limited (IOCL) for Rs.2956.19 crore, Bharat Petroleum Corporation Limited (BPCL) for Rs.996.87 crore and Hindustan Petroleum Corporation Limited (HPCL) for Rs.1017.94 crore on March 29, 2007 (Thursday).

The investment in the Special Bonds by the banks will not be reckoned as an eligible investment in Government securities by banks and insurance companies for their statutory requirements. 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 Special Bonds will be transferable and eligible for market ready forward transactions (Repo). The bonds, however, will not be an eligible underlying security for ready forward transactions (Repo/Reverse Repo) with the Reserve Bank of India.

Department of Economic Affairs, Ministry of Finance New Delhi: Chaitra 8, 1928; March 29, 2007

Source : Press Information Bureau

Keywords