| Oil and Natural Gas Corporation (ONGC), the country's largest oil exploration company, has also been issued bonds worth Rs 197.37 crore while Indian Oil Corporation (IOC), the largest oil marketing company, has got Rs 23.14 crore worth of additional bonds for settling other contingent liabilities. |
| The oil bonds have an interest rate of 8.40 per cent and will mature in 2025. They do not have a statutory liquidity ratio (SLR) status. |
| "Investment in special oil bonds by banks and insurance companies will not be reckoned as an eligible investment in government securities for their statutory requirements," the government said in a statement. |
| The petroleum ministry had demanded SLR status for new oil bonds. This would have enabled the companies to sell these bonds in the government securities market. |
| Banks buy bonds with SLR tags to meet the statutory reserve requirements, which mandate that they invest at least 25 per cent of their deposits in SLR bonds. |
| However, investment by insurance companies in these bonds would be considered as investment under the "other approved securities" category as defined under Insurance Regulatory and Development Authority (Investment) Regulations, 2000, the statement added. |
| Of the Rs 9,076.41 crore worth of bonds issued today, IOC has got a benefit of Rs 5,121.62 crore, Bharat Petroleum Corporation (BPCL) Rs 2,078.92 crore and Hindustan Petroleum Corporation (HPCL) Rs 1,899.01 crore. |
| The government had earlier issued oil bonds worth around Rs 12,000 crore to oil marketing companies for partly meeting their retail losses as they sell at subsidised prices. |
| The three oil marketing companies are projected to incur retail losses of around Rs 71,000 crore in this financial year. |
| In February, the Union Cabinet had agreed to bear 57 per cent of the total losses in the year. This would take the total value of the oil bonds needed for the year to around Rs 41,000 crore. |
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