Relaxation in External Commercial Borrowing Policy for the Upcoming 2g Spectrum Auction
The External Commercial Borrowing (ECB) Policy is reviewed periodically by the Government in consultation with RBI keeping in view the evolving macro economic situation, external sector assessment, needs of the corporate sector and sectoral requirements.
As per the extant policy, eligible borrowers in the telecommunication sector are permitted to avail of ECB for the purpose of payment for spectrum allocation, under the automatic route. Consequent upon a review and in order to develop the telecom sector in the country, the Government, in January 2010, had provided a window of 12 months to the successful bidders of 3G auction to refinance the Rupee loans
initially availed of from the domestic lenders to make payment for spectrum allocation with a long-term ECB under the approval route subject to certain conditions.
On a review of the current ECB policy and keeping in view the large outlay of funds required to be paid directly to the Government within a limited period of time, the following relaxations are provided for the upcoming 2G spectrum auction:-
RBI is expected to issue relevant circular giving effect to the aforesaid liberalization measures in ECB policy within a week.