The Department of Telecommunications (DoT) has reduced performance and financial bank guarantee requirement of telecom operators by 80 per cent. The DoT had issued a licence amendment note with regard to this.
As per the amended norms, telecom operators will be required to provide a performance bank guarantee of up to Rs 440 million for each service for the telecom licence compared to Rs 2.2 billion mandated under the old rule.
Likewise, telecom operators will need to provide a financial bank guarantee of maximum Rs 88 million per circle now, against the previous requirement of Rs 440 million.
Further, DoT has mentioned in its note that the rule will not be applicable in cases where bank guarantees have been furnished due to any court order or are subject to any litigation. Also, the rules will not apply to telecom operators, who are currently going through the liquidation process.
With the incoming of the amended norms, telcos will be able to unblock the cash that they keep with banks to furnish bank guarantees.