DoT cuts bank ensure prerequisite for telcos by 80%

DoT cuts bank ensure prerequisite for telcos by 80%

The department of telecom has reexamined the bank ensure prerequisite for telecom operators to 20%, adequately slicing the necessity by almost 80%, a notification by the regulator said.

This decision will bring about higher cash flows for telcos like Vodafone Idea and Bharti Airtel. It will likewise give more leeway for banks to lend more to the debt-ridden organizations in the future.

Under the revised standards, telecom operators will be needed to give a performance bank assurance of up to ₹44 crore for each help for the telecom licence contrasted with ₹220 crore mandated under the old rule.

Also, telecom operators should give a financial bank assurance of maximum ₹8.8 crore per circle now, against the past prerequisite of ₹44 crore.

The standard won’t be appropriate in cases where bank ensures have been outfitted because of any court request or are dependent upon any litigation, the licence amendment note said. The standards won’t apply to telecom operators, who are right now going through the liquidation process.

Nonetheless, the amended rationalisation of bank ensures are dependent upon modifications. For example, the current bank ensures outfitted or needed because of any court order or litigation will proceed.

In a series of changes to ease financial burden on the telecom sector, the public has likewise prior revised licence standards to defend the loan cost for postponed payment of licence fee.

Recently, the government told its decision to allow 100% foreign direct investment (FDI) under automatic route in the striving telecom sector.

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