The OID Board determines the terms and conditions governing the loans from time to time on the basis of national importance of the project(s) being undertaken by the Oil PSUs and also the current market scenario for determining the rates of interest on OIDB loans. An independent Project Appraisal Cell has been formed to determine the eligibility of OIDB loan assistance.
The OID Board has constituted a Standing Committee for review of the interest rates on OIDB loans for different tenors after taking into account the interest rates prevailing in the market and giving its recommendations to the Board. The Committee meets once in every quarter to review the interest rates on OIDB loans.
The formulation for charging interest rates on OIDB loans is as follows:
(i) Benchmark Rate: Yield of Government Security month end (semi-annualised) - obtained from FIMMDA with average maturity of 6.5 years for 10 years loans and 3.5 year for 5 years loans.
(ii) Spread over Benchmark Rate: Based on credit rating of the company and on the basis of tenure of the loan, the following spreads to be added to the benchmark rate :-
| Credit Rating | Spread |
| AAA and AA | 0.10 |
| A | 0.20 |
| BBB and BB | 0.30 |
| B and below | No loan |
Further spread on the basis of tenure i.e.
Ø 0.10 for loan up to 05 years and
Ø 0.20 for a tenure more than 05 years to be considered.
(iii) A discount of 25 basis points may be given to the projects located in the region of North East and Union Territories of Jammu & Kashmir and Ladakh for loan tenor of 10 years. With respect to loan tenor of 5 years, the discount may be limited to 15 basis points.
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