Government relaxes ECB norms for 3G bidders
27 Jan 2010
Giving a major boost to the forthcoming 3G auction in March, the finance ministry has eased the guidelines for external commercial borrowing (ECB) by the successful bidders, a statement released on Monday said.
As per the new policy, the winning bidders are allowed to pay the fee for spectrum allocation in rupees and refinance it with a long-term ECB through the approval route within 12 months from the date of payment of the final installment to the government.
The present DoT guidelines warrant 25 per cent of the bid amount to be paid within 5 days of the close of the auction and the balance amount within 15 days of the closure.
The finance ministry said that the policy has been amended as the amount involved is huge and bidders find it difficult to raise ECB to meet the required payment due to the short window available between the date of application for the auction and the date of payment.
According to the new policy, end use of the funds has to be monitored by the authorised dealers. It also stipulates that domestic banks will not be permitted to provide any guarantee.
The government last week said that it intends to complete the 3G spectrum auction by March. (See: 3G auction by March; but only three players in most circles)