RBI Allows Oil Marketing Firms To Raise Funds From Overseas To Meet Working Capital Needs

State-owned oil marketing companies have been allowed to raise $10 billion for meeting their working capital needs, Moneycontrol has reported. The move comes at a time when crude oil prices have touched $ 85 dollars per barrel.

“Public Sector Oil Marketing Companies will raise $10 billion for 3-5 year for financing their permanent working capital. RBI has also granted necessary exemptions under the ECB policy,” Economic Affairs Secretary Subhash Chandra Garg Tweeted.

“The Reserve Bank of India has also increased the overall limits for external commercial borrowings in a separate circular. “It has been decided, in consultation with the Government of India, to liberalise the said provision and permit public sector Oil Marketing Companies (OMCs) to raise ECB for working capital purposes with minimum average maturity period of 3/5 years from all recognised lenders under the automatic route,” the circular said.

This move will help the oil marketing companies to handle price fluctuations in global crude oil prices.