Public companies to park 60 percent surplus cash with state banksNovember 11th, 2008 - 10:28 pm ICT by IANS
New Delhi, Nov 11 (IANS) With the government reiterating that public enterprises will have to park 60 percent of their reserves with state-run banks without calling for competitive bids, several companies fear they will lose large amounts of money over the deposit.After a meeting Tuesday between Finance Minister P. Chidambaram and chiefs of state-run companies, Oil and natural Gas Corp (ONGC) chairman R.S. Sharma said the companies would end up losing huge chunks of cash since they were not calling for bids for depositing.
ONGC alone will lose Rs.3-4 billion annually, he said.
“We have a surplus of Rs.250 billion, out of which 85-90 percent is parked in state-run banks,” Sharma told reporters. A portion of the sum will be used to fund the acquisition of the UK-based Imperial Energy.
The central public sector undertakings have a total reserve of Rs.1 trillion in surplus cash, Sharma said.
The meeting with the finance minister was attended by the heads of other PSUs like Bharat Sanchar Nigam Ltd, Gas Authority of India Ltd and Steel Authority of India.
The meeting was called after the state-run banks complained that PSUs were not following the finance ministry’s guidelines in January to keep at least 60 percent of their surplus funds with them.