It has been decided to put in place an arrangement for financing the standing working capital requirements of Oil Marketing Companies (OMCs) by long-term foreign currency loans. The arrangement will be as follows:

(i)    OMCs will borrow USD 10 billion with a maturity of 5 years in a phased manner, with an initial tranche of USD 4 billion followed by two tranches of USD 3 billion each, all borrowing completed in a period of one year from now.

(ii)    OMCs will not be required to hedge their exposure.

Financing working capital via long-term foreign currency loans allows phased borrowing with no mandatory hedging. Arrangement to finance standing working capital of Oil Marketing Companies by facilitating access to long-term foreign currency loans through phased multi-tranche external borrowing with an overall multi-year maturity completed within one year, and expressly exempting OMCs from mandatory hedging of foreign currency exposure.