The Government of India have announced the issue of ‘8.40 per cent Oil Marketing Companies Government of India Special Bonds, 2025’ for Rs. 9,296.92 crore (nominal). The Special Bonds are being issued to four Oil Marketing Companies as compensation towards estimated under-recoveries on account of sale of sensitive petroleum products during the current financial year (Rs.9,076.41 crore) and settlement of contingent liabilities of Oil and Natural Gas Corporation Ltd (Rs.197.37 crore) and Indian Oil Corporation Ltd. (Rs.23.14 crore) pertaining to APM period. The Special Bonds are being issued at par to Indian Oil Corporation Ltd.

(IOC) for Rs. 5,121.62 crore, Bharat Petroleum Corporation Ltd (BPCL) for Rs.2,078.92 crore, and Hindustan Petroleum Corporation Ltd.(HPCL) for Rs. 1,899.01 crore and Oil and Natural Gas Corporation Ltd for Rs.197.37 crore on March 28, 2008 (Friday).

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. 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.

Sourced From: Reserve Bank of India

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