Companies can refinance 3G payments via ECBs till FY14: RBI

Moneycontrol Bureau

Indian companies, which were successful bidders in the 3G spectrum auctions can refinance their payments in rupee terms through external commercial borrowing (ECB) route with an extended window till March 31, 2014; the Reserve Bank of India (RBI) said in a notification on Tuesday.

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"On a review it has been decided that ECB window for financing 3G spectrum rupee loans, that are still outstanding in telecom operator's books of accounts, will be open upto March 31, 2014," the central bank said.

Earlier in January, 2010; RBI had mentioned that the payment for spectrum allocation might initially be met out of the rupee resources by the successful bidders, to be refinanced with a long term ECB, under the approval route. However, it was subject to the condition that ECB should be raised within 12 months from the date of payment of the final installment to the government.

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The government had auctioned 3G spectrum for around 22 service areas wherein many big companies including Vodafone, Bharti, Reliance, Idea, Tata, Aircel and others, had bid for it. An estimated Rs 67,000 crore entered the government’s coffer on account of 3G spectrum allocations.

"All other aspects of the ECB policy shall remain unchanged. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law," RBI said.

saikat.das@network18online.com