RBI extends refinancing rupee loans by telecos to March 2014
Mumbai: The Reserve Bank Tuesday extended the scheme for telecom companies to refinance their rupee loans taken for funding 3G spectrum with long-term overseas borrowing till March 31, 2014.
"On a review it has been decided that ECB (external commercial borrowing) window for financing 3G spectrum rupee loans, that are still outstanding in telecom operator?s books of accounts, will be open up to March 31, 2014," the Reserve Bank said today.
The payment for spectrum allocation may initially be met out of the rupee resources by successful bidders, to be refinanced with a long-term ECB is subject to the condition that ECB should be raised within 12 months from the date of payment of the final installment to the government.
Further, the RBI also extended the scheme of availing of ECB for working capital for civil aviation sector till December 31, 2013.
Besides, the central bank also said that the scheme of ECB in Renminbi has been reviewed and it has been decided that this scheme may be discontinued from the date of issue of this circular.
The decision has been taken as it was observed that the facility of ECB in Renminbi (RMB) had remained unused so far.
Indian companies in the infrastructure sector were allowed to avail of ECB in Renminbi (RMB) under approval route up to an annual cap of USD one billion (about Rs 5,900 crore).
In a separate notification, RBI extended the existing scheme of buyback or prepayment of FCCBs (foreign currency convertible bonds) under the approval route to December 31, 2013.
It said the decision was taken on the back of developments in the global financial markets.
Finance Minister P Chiambaram today said that the US Federal Reserve Chairman Ben Bernake's statement that as much as USD 5 billion went out of India within two weeks was "completely misunderstood."
"The rupee is very stable. A large amount of money flowed into India. Between January and May alone, I think a little over USD 5 billion flowed into India. (But) following Bernanke's statement, USD 5 billion flowed out of India in a matter of two weeks. This is unfortunate", he said.
The rupee touched all-time low of 59.98 to a dollar last week following Bernanke's statement that the US government could slowdown purchase of bonds, depending on economic condition, later this year. Today rupee closed at 59.66.
Besides reviewing the FDI caps, the government will be taking some key decisions in the coming days, Chidambaram said.
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