New Delhi, Feb 15 (UNI) The Oil Ministry and Finance Ministry today took diffrent stands on providing Statutory Liquidity Ratio (SLR) status to oil bonds.
''I do not know yet. Let me see. Nothing on the SLR issue has come to me,'' Finance Minister P Chidambaram said.
This would mean oil bonds issued to oil marketing companies (OMCs) will not compete with government securities.
It 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.
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.
Bonds amounting to 42.7 per cent of under-recovery amounting to 24,000 crore has been issued while OMCs have absorbed 8.4 per cent or Rs 4,800 crore.
However, Petroleum Secretary M S Srinivasan said on the sidelines of a conference organised by Ficci ''we have taken up with the finance ministry for SLR status of old and new oil bonds. We hope for a favourable decision.'' Today's confusing remarks by the Finance Minister and the flip-flop between the two ministries will only add to bond traders woes.
UNI MP PBB BST1659