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Our Bureau

New Delhi, Aug. 8 In a move that would allow Indian Oil Corporation Ltd (IOC) to tide over its liquidity crunch, the Reserve Bank of India has allowed the company to use its Paradip refinery allocated credit line for meeting its working capital requirement. This is expected to add at least Rs 20,000 crore to working capital base of Indian Oil.

However, the same will be counted on actual disbursement basis, a senior official said. RBI approval was required in the wake of single borrower limit of 25-30 per cent. The IOC Director (Finance), Mr S.V. Narasimhan said, “RBI nod has been received on Tuesday.”

To ease the liquidity crunch faced by IOC, the Petroleum Ministry had sought permission for the same from the Finance Ministry. The Petroleum Ministry had written to the Finance Ministry seeking immediate enhancement of the credit limit of the three public sector oil marketing companies — IOC, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — as they were in danger of exceeding their permissible limits for borrowings.

The Ministry was also seeking to raisethe working capital credit limit of HPCL by Rs 2,500 crore and BPCL by Rs 3,000 crore.

More Stories on : Announcements | Petroleum | RBI & Other Central Banks

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