Spend Rupees for Spectrum Allocation,get it refinanced with ECB within 12months under Government Route, RBI says in addition to exisitng Automatic route

RBI/2009-10/ 292 dated January 25, 2010 vide A.P. (DIR Series) Circular No. 28

As per the existing ECB 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. Keeping in view the large outlay of funds required to be paid directly to the Government within a limited period of time, it has been decided to make a one-time relaxation in the end-use conditions of the ECB policy.

Accordingly, the payment for spectrum allocation may initially be met out of Rupee resources by the successful bidders, to be refinanced with a long-term ECB, under the Government approval route, subject to the following conditions:
i) The ECB should be raised within 12 months from the date of payment of the final installment to the Government;
ii) The designated AD - Category I bank should monitor the end-use of funds;
iii) Banks in India will not be permitted to provide any form of guarantees; and
iv) All other conditions of ECB, such as eligible borrower, recognized lender, all- in-cost, average maturity, etc, should be complied with.

 

Eligible borrowers in the telecommunications sector proposing to fund the payment for Spectrum allocation directly out of the proceeds of the ECBs may continue to avail of the ECBs under the automatic route as per the existing policy.

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