The government today announced relaxations in the provisions of the external commercial borrowing (ECB) policy in order to cater to the funding needs of the corporate sector in the backdrop of the upcoming auction of second-generation (2G) radio spectrum.
Accordingly, successful bidders would be eligible to refinance their rupee loans, availed from domestic lenders for making upfront payment in the 2G auction, with a long-term ECB, under the 'automatic route' subject to certain conditions.
Such bidders can also avail of short-term foreign currency loans 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 in the 2G spectrum auction would have to pay huge funds directly to the government within a limited period of time, the release noted.
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.
The policy has been reviewed in the light of the evolving macro economic situation, external sector assessment, needs of the corporate sector and sectoral requirements, the release said.