RBI To Accept Oil Bonds As Collateral
The Reserve Bank of India on Friday said it will start accepting oil bonds for its liquidity adjustment facility. The decision will expand the eligible pool of securities available for borrowing from the RBI's window and for parking funds with the RBI.
“It has been decided that the oil bonds issued by Government of India will qualify as eligible securities for Repos, Reverse Repos and Marginal Standing Facility (MSF),” said the RBI.
Oil bonds were issued in the 2005-06 period to compensate oil companies for under-recoveries on sales of price-regulated petroleum products. Oil companies could use these bonds to raise funds from the market.
Oil bonds, however, will not qualify to be included the statutory liquidity ratio (SLR) bucket which comprises of government securities.
Separately, the RBI said that it has been decided to do away with the margin requirement for the securities provided as collateral to the successful participants in reverse repo operations.
The changes come against the backdrop of surplus liquidity in the banking sector due to a surge in deposits of Rs 500 and Rs 1000 notes which have been withdrawn from circulation. Banks are parking this surplus liquidity with the RBI via reverse repo operations. However, some economists fear that the RBI will soon run out of securities to offer to banks in return for their deposits.
The amount of government securities (G-Sec) available with the Reserve Bank of India (RBI) to offer banks in exchange of the spurt in deposits is nearing a critical limit, which may force the central bank to look at alternative means to sterilise liquidity.India Ratings and Research
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
