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
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:-
· 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.
· Such bidders can also avail of short term foreign currency loan in the
nature of bridge finance under the `automatic route` for the purpose of
making upfront payment towards 2G spectrum allocation and replace the
same with a long term ECB under the `automatic route` subject to certain
terms and conditions.
· Successful bidders will also be allowed to avail of ECB from their
ultimate parent company without any maximum ECB liability-equity ratio
under the `automatic route` subject to certain conditions.
RBI is expected to issue relevant circular giving effect to the
aforesaid liberalization measures in ECB policy within a week.