 New
Delhi: The
Indian Oil Corporation (IOC) has entered the call money
market in order to raise funds of around Rs2,000 crore
to meet its working capital requirements. The company
is using the Rs2,320-crore oil bonds issued to it by the
government recently as collateral.
The
company would be using the Collateralised Borrowing
and Lending Obligation (CBLO) instrument offered by
the Clearing Corporation of India, which would help
it to reduce borrowing costs. IOC would be trading about
Rs200-300 crore daily by using the CBLO instrument.
CBLO
instrument enables corporates to become members and
access this platform by pledging government securities
against their borrowing limits and lending it at the
call money market rate.
It
requires members to open an account with CCIL for depositing
securities, which are offered as collateral or margin
for borrowing and lending of funds.
The
government had recently issued special government bonds
amounting to Rs5,762.85 crore to oil companies in order
to liquidate the balance payable to these firms from
the Oil Pool Account.
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