Finance Minister P Chidambaram on Tuesday said the Rs 14,150 crore (Rs 141.50 billion) worth of oil bonds meant for oil marketing companies will be issued within this month.
Chidambaram, however, ruled out statutory liquidity ratio (SLR) status for oil bonds, which implies that banks will not be able to subscribe to the bonds as part of the requirement that they invest 25 per cent of their liabilities in approved securities among other things.
"The oil bonds will be issued within this month and they will not get SLR status," Chidambaram said.
The government has approved the issue of the first tranche of oil bonds worth of Rs 14,150 crore out of total of Rs 28,300 crore (Rs 283 billion) to state-owned oil marketing companies to compensate them for the losses on retail sales of petrol and diesel.
The finance minister had last month said that the bonds to be issued by the government to compensate oil firms for losses would not qualify as bonds.
"We are not giving SLR (statutory liquidity ratio) status to oil bonds. There is no decision to give SLR status to oil bonds," Chidambaram had stated.
If oil bonds to be issued to oil companies are also given SLR status, then there is a possibility of banks investing in these bonds to fulfil their SLR requirements, thereby buying less government securities to that extent.
Last year, the oil companies were issued bonds worth Rs 11,500 crore (Rs 115 billion) with maturity of three, six and nine years and respective coupon rates of 7.33 per cent, 7.47 per cent and 7.61 per cent.
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