Reacting to the development, shares of SpiceJet and Jet Airways gained on the bourses. The SpiceJet scrip gained 5.48 percent to Rs 14.05, while Jet Airways rose 2.65 percent to touch an intra-day high of Rs 227.90 on the BSE.
Market analysts said the jump in the counters was largely a knee jerk reaction to the RBI's move of extending the ECB borrowing window.
The Reserve Bank had on Wednesday extended the deadline for aviation sector to raise funds through external commercial borrowings (ECBs) route till March 2015, a move that would provide relief to the cash-crunched sector.

"On a review, it has been decided that this scheme of raising ECB for working capital for Civil Aviation Sector will continue till March 31, 2015," RBI said in a notification.

As per the earlier guidelines, the scheme was valid till December 31, 2013.

The overall ECB ceiling for the entire civil aviation sector would be USD 1 billion and the maximum permissible ECB that can be availed by an individual airline company will be USD 300 million, RBI had said.
This limit can be utilized for working capital as well as refinancing of the outstanding working capital Rupee loan availed of from the domestic banking system, it added.

Airline companies registered under the Companies Act, 1956 and possessing scheduled operator permit licence from Directorate General of Civil Aviation for passenger transportation are eligible to avail ECBs for working capital needs.


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