Lead managers to the ensuing public issue of Oil and Natural Gas Corporation have agreed not to charge any commission on participatory notes aimed at attracting large foreign investors as part of its underwriting agreement.

An undertaking to this effect was given by the three book running lead managers DSP Merrill Lynch, Kotak Mahindra Capital and JM Morgan Stanley earlier this week, sources associated with the divestment process said.

The merchant bankers had quoted an all time low figure of 0.075 per cent as transaction fee for the mandate.

The government is understood to have taken the step to avert any possible litigation in case other merchant bankers who were in the fray for the issue take up cudgels against the combined transaction fees and commission for participatory note.

The waiver of charges is part of three conditions agreed to by the merchant bankers including full disclosure of information for issuance of participatory notes, which had been legally vetted.

Earlier this week market regulator Securities and Exchange Board of India had granted permission to the lead managers for issue of participatory notes for ONGC offer following favourable recommendation from the government, which is hoping to raise about Rs 10,000 crore (Rs 100 billion) from the sale.