IOC to close its foreign currency account in the Caribbean

Vol 6, PW 7 (05 Jun 02) News in Brief

India's central bank Reserve Bank of India has told IOC to put in place a new system of foreign currency purchase for crude oil imports by 24th July.

Until now, IOC has been using a foreign currency loan account with State Bank of Indias Nassau branch in the Caribbean, which it used to finance crude oil purchases when it was the sole importer for all state-owned companies. When IOC lost its monopoly last year, RBI slashed the upper limit of the account from $200m to $50m, and further slashed it to $10m from January this year.

From 25th April the limit was slashed to $5m and by July, the RBI wants IOC to close the account completely. Under a new system, IOC will buy the exact amount of foreign currency required on a daily basis.

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