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Mobile & Wireless

India central bank relaxes foreign borrowing for telecoms

Tuesday 27 November 2012 | 15:41 CET | News
The Reserve Bank of India (RBI) has relaxed its borrowing rules to allow operators to raise long-term funds from overseas to refinance domestic loans taken out to pay for 2G spectrum, reports PTI. The RBI said it relaxed the external commercial borrowing (ECB) rules due to "large outlay of funds required to be paid directly" to the government within a limited period of time. The central bank further said that the bidders in the 2G auction will be allowed to avail of ECB under the automatic route from their ultimate parent company without any maximum ECB liability-equity ratio. This applies only if the lender holds a minimum paid-up equity of 25 percent in the borrower company, either directly or indirectly. Furthermore, the bidders can avail of short-term foreign currency loans as bridge finance under the automatic route for making upfront payments for the spectrum and replace the same with a long-term ECB under the automatic route.

Categories: Mobile & Wireless
Countries: India
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