Reserve Bank of India's (RBI) proposal to state owned oil marketing companies (OMCs) for buying 50% of dollar purchases through one public sector bank has been rejected by the Ministry of Petroleum. Earlier, the OMCs had agreed RBI’s plan to buy half of dollar purchases from State Bank of India and to reduce the amount sourced through competitive quotes from multiple banks.
RBI argues that the dollar quotes from multiple banks are giving exaggerated impression of demand and strengthens dollar against rupee. Though, OMCs advocates that the rates arrived through bidding is cheaper about 3 paise per dollar than what SBI offers, further the non-competitive buying would raise transparency issues and would attract censure from the Comptroller & Auditor General (CAG).
India’s largest buyer of dollars, OMCs gains at least Rs 3 crore on a minimum buy of $10 million, through rates arrived by competitive bidding from multiple banks. Indian Oil Corp sources about 20% of its dollar purchases from SBI and the remainder through bids from a panel of 16 banks. While, the other two oil giants, Bharat Petroleum and Hindustan Petroleum source their entire requirement through competitive bidding.
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