The Ministry of Finance and the Reserve Bank of India (RBI) have agreed to consider spectrum as a tangible asset, say news reports. This is expected to enable operators to mortgage spectrum in order to raise funds from banks.
However, RBI has subject this stipulation to a few conditions. According to RBI guidelines, the banks providing the loan would have full rights to the spectrum in case the operator defaulted on the payments. The banks would also have the right to sell, exchange or auction the spectrum in lieu of the money given to the defaulting operator.
The RBI has also asked to ensure that the lender?s interests are considered in the tripartite agreement between the government, the lender and the borrower. Meanwhile, the Ministry of Finance has ratified the RBI’s suggestions and has asked the Department of Telecommunications (DoT) to include the guidelines set by the RBI in the tripartite agreement.
Prior to this, DoT had asked RBI to consider permitting operators to mortgage spectrum for any future deals. This was done as banks are currently reluctant to provide loans to operators without any collateral.
