Overseas borrowing norms relaxed for 2G spectrum bidders
The government Friday relaxed the external commercial borrowing (ECB) norms for companies that will participate in the 2G spectrum auction next week.
"The successful bidders in the 2G auction would be eligible to refinance their Rupee loans availed of from the domestic lenders for making the upfront payment with a long-term ECB, under the automatic route subject to certain conditions," the finance ministry said in a statement.
The auction for GSM spectrum in the 1800 Mhz band will start Nov 12 and for CDMA spectrum in the 800 Mhz will be done two days after the GSM auction is complete.
The government's move is aimed at reducing the cost of money to be paid in the auction and making the participation easier.
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," the ministry said.
The Reserve Bank of India (RBI) is expected to issue a relevant circular giving effect to the liberalised policy within a week, the ministry said.