The Reserve Bank of India has allowed the successful bidders in the 2G auction to refinance their domestic loans with long term external commercial borrowing (ECB), reports PTI.

This has been done in view of the large outlay of funds required to be paid directly to the government within a limited period of time, RBI said.

"The successful bidders making the upfront payment for the award of 2G spectrum initially out of Rupee loans availed of from the domestic lenders would be eligible to refinance such Rupee loans with a long-term ECB, under the automatic route,"  the agency  quotes the RBI notification. 

As far as the short term foreign currency loans are concerned , the RBI stipulates that it can be availed of 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.

"The relaxations in respect of the ECB liability-equity ratio, percentage of shareholding by the ultimate parent, refinancing of Rupee loans and bridge finance are part of a special dispensation applicable only to the successful bidders in the upcoming 2G spectrum auction," the RBI added.