Telecos allowed to raise ECBs to pay for 2G spectrum
"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," a Finance Ministry official said.
The bidding for the airwaves is scheduled to start from November 12.
The telecom industry had been seeking further easing of the ECB norms as banks are reluctant to lend money to the sector.
In order to develop the telecom sector, the government in January 2010 had provided a window of 12 months to successful bidders of 2G auction for refinancing the rupee loan from domestic lenders to make payment for spectrum allocation with a long term ECB under the approval route.
"Keeping in view the large outlay of funds required to be paid directly to the government within a limited period of time, relaxation is provided for the upcoming 2G auction," the official added.
The Finance Ministry official said bidders can also avail of short-term currency loans in the nature of bridge-finance under the automatic route for making upfront payment towards 2G spectrum allocation and replace it with long-term ECB under the automatic route, subject to certain terms and conditions.
Next week, the government is auctioning spectrum at a minimum bid price of Rs 14,000 crore for 5