2G auction: RBI eases funding for bidders
According to the RBI, successful bidders making upfront payment for the award of 2G spectrum initially out of rupee loans availed of from the domestic lenders would be eligible for refinancing such rupee loans with a long-term ECB, under the automatic route. This will be subject to the condition that the long-term ECB should be raised within a period of 18 months from the date of sanction of such rupee loans for the stated purpose from the domestic lenders.
Other condition say the bank has evidenced the payment of upfront fees to the government in the form of a receipt from Department of Telecom and the bank should monitor the end-use of funds.
“The successful bidders in the 2G auction will be allowed to avail of ECB under the ‘automatic route’ from their ultimate parent company without any maximum ECB liability-equity ratio subject to the condition that the lender holds minimum paid-up equity of 25 per cent in the borrower company, either directly or indirectly,” the RBI said in a notification.
It said the successful bidders can 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
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