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Our Bureau

New Delhi , Aug. 28

The Finance Ministry is yet to take a final decision on the issue of granting statutory liquidity ratio (SLR) status to the oil bonds that the Government plans to issue to state-run oil marketing companies to compensate them for their under-recoveries on sale of oil products.

The Petroleum Ministry is understood to have formally made a request for SLR status for the oil bonds. The Government had as part of the first batch of supplementary demands for grants for 2006-07 obtained Parliamentary approval for bonds worth Rs 14,150 crore to be issued to state-run oil companies.

Indications are that the bonds may be issued in the first week of September.

Since the bonds would be tradable, the oil marketing companies can sell the bonds in the market and boost their profits.

Any move to accord SLR status to the oil bonds would add to the liquidity as such, making the bonds attractive to potential investors.

SLR is an amount that banks in India have to maintain in cash, gold or approved securities. Currently, the quantum is specified as 25 per cent of the demand and time liabilities of a bank as on the last Friday of the second preceding fortnight.

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