Oil and Natural Gas Corporation is against investing its surplus fund with PSU banks as giving business on nomination basis was causing loss of interest revenue to it.
"ONGC has expressed difficulty with the implementation of the Government guidelines relating to investment of their surplus funds," minister of state for petroleum and natural gas Jitin Prasada said in a written reply to the Rajya Sabha.
ONGC has written to the government numerous times saying the state-run banks on getting assured business act in cartel, offering interest rates lower than even that on retail deposits.
"They have mainly pointed out that the process of placing deposits with banks without inviting competitive bids is causing loss of interest revenue," he said.
ONGC, which has a cash surplus of about Rs 18,000 crore (Rs 180 billion), is losing Rs 200-300 crore (Rs 2-3 billion) in interest revenues annually after it was forced to discontinue the practice of calling competitive rates for parking its cash.
"It has been observed that the rates of interest offered by public sector banks on bulk deposits are less than the rates offered by them on retail deposits for the same period of maturity," ONGC chairman and managing director R S Sharma wrote to Petroleum Secretary R S Pandey on September 3.
"The difference in some cases is as high as 225 basis points."
Sister PSUs BSNL, BHEL, NTPC and SAIL, too, have opposed the bailout of state-run banks at their expense.
