The government on Tuesday asked the central public sector enterprises to follow the rule of parking at least 60% of their over Rs 1,00,000 crore of surplus funds with state-owned banks and not call for competitive bids for depositing money.
?Finance minister P Chidambaram has asked CPSEs to follow government instructions of parking 60% of their investible surplus with PSU banks,? ONGC chairman and managing director RS Sharma said after a meeting of CPSE heads with the minister on Tuesday. Sharma said CPSEs have over Rs 1,00,000 crore of surplus investible funds and the finance minister has further asked the PSUs not to call for competitive bidding for depositing these funds.
When asked whether the government directive would mean potential losses to the CPSEs, he said, the oil major has about Rs 23,000 crore of surplus funds and by rejecting the highest bid the company could lose about Rs 300-400 crore annually. The meeting comes amid complaints by public sector banks that CPSEs were not following the finance ministry guideline. Petroleum secretary RS Pandey, however, said petroleum companies were following the norm. ?There is no such issue with petroleum companies as all of them have more than 60% of their surplus funds parked with the PSU banks,? he later said.
Gail chairman UD Choubey, SAIL CEO SK Roongta, BSNL chief Kuldeep Goyal and senior officials of the petroleum, power and finance ministries, among others attended the meeting. The finance ministry had in January directed the public sector undertakings to deposit at least 60% of their surplus funds with the PSBs. SAIL has about Rs 15,000 crore of surplus funds, its chairman Roongta said, adding ?we will follow government instruction in this regard.? Pointing out that Gail has around Rs 4,000 crore of investible surplus, Choubey said, ?While FM wants us to deposit 60% with the PSU bank, we have 100% funds parked with them.?
BSNL has around Rs 30,000-35,000 crore as surplus, Goyal said. ?We have put 75% of our investible surplus with the PSU banks,? he said. To earn higher interest rates, CPSEs with surplus cash call for bids from banks for depositing funds. As a result, PSU banks lose out deposits to private sector banks, which bid aggressively by offering higher interest rate for CPSE funds.
CPSEs must park their surplus funds with the public sector banks as per the rules. ?If public sector banks are accountable to meet the objective of the government, the PSUs must give them first preference,? said chairman and managing director of Punjab National Bank KC Chakrabarty, on Tuesday, on the sidelines of a Micro-finance Summit.