OMCs to complete $10 billion overseas borrowing in 1-year: Finance Ministry

NEW DELHI: A day after relaxing overseas borrowing norms for oil companies, the government of India on Thursday said state-owned fuel retailers will have to complete $10 billion external commercial borrowing (ECBs) within a year and they would not be required to hedge the exposure.nnThe Reserve Bank of India (RBI) on Wednesday relaxed policy on borrowing from overseas up to $10 billion external debt for working capital needs amid depreciating rupee.nn?OMCs will borrow $10 billion with a maturity of 5 years in a phased manner, with an initial tranche of $4 billion followed by two tranches of $3 billion each, all borrowing completed in a period of one year from now,? a Finance Ministry statement said.nnOil marketing companies will not be required to hedge their exposure, it said.nnTill now OMCs were not allowed to raise ECB for working capital needs on a long-term basis. They could raise a maximum of one-year overseas loan by way of buyers credit, repay it within 12 months and raise it again thereafter.nnThe move comes at a time when international oil prices have touched four-year high of $86 per barrel and the rupee plummeted to a low of 73 to the dollar.nnIndian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) will be allowed to raise overseas funds with a minimum average maturity period of 3 or 5 years under the automatic route.nnThe RBI also lifted the individual borrowing limit set at $750 million under the external commercial borrowing (ECB) framework.nnWith oil prices climbing to four-year high and the rupee plunging to new lows, imports have come costlier. Oil companies now need a higher working capacity to meet their monthly import requirements.nnIndia is 81% dependent on imports to meet its oil needs.nnSource: Press Trust of India