Government has issued guidelines from time to time on investment of surplus funds of CPSEs to ensure maximum safety, no element of speculation on the yield, sound commercial judgment and maturity period of not more than one year. Instruments have been specified through which surplus funds of the CPSEs can be invested. Recently it has also been decided that Navratna and Miniratna CPSEs can invest 30% of their surplus funds in SEBI regulated Public Sector Mutual Funds. It has also been decided that at least 60% of surplus funds should be placed with Public Sector Banks and the practice of inviting competitive bids for bulk deposits should be discounted.

This information was given today by Minister of State in the Ministry of Heavy Industries and Public Enterprises, Shri Pon. Radhakrishnan in a written reply to Lok Sabha question.

Investment of surplus funds: limited mutual fund allocations allowed while majority placement with public banks is required. Guidelines require CPSE surplus fund investments to prioritise safety, avoid speculative yield-seeking, apply sound commercial judgment, and restrict maturities to one year; Navratna and Miniratna CPSEs may allocate a limited portion to SEBI-regulated public sector mutual funds while a majority of surplus funds are to be placed with public sector banks and competitive bidding for bulk deposits is to be de-emphasised.