November 22, 2024 13:36 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
PM Modi bestowed Dominica's highest award at India-CARICOM Summit | 69-year-old Delhi man, a St. Stephen's alumnus, arrested for conning govt officers by posing as ex-IPS | 'Baseless': Adani Group denies US charges of bribery and fraud against Gautam Adani | AAP's first list of candidates for Delhi polls feature six turncoats | PM Modi is incapable to arrest Gautam Adani: Rahul Gandhi after tycoon charged with bribery and fraud in the US
DoT likely to return bank guarantees of telcos, govt to approach Supreme Court: Report
Telecom Sector | Bank Guarantees
Image Credit: Pixabay

DoT likely to return bank guarantees of telcos, govt to approach Supreme Court: Report

| @indiablooms | 25 Nov 2021, 02:39 am

New Delhi/IBNS: The Department of Telecommunications (DoT) is likely to tell the Supreme Court soon that the government will return bank guarantees (BG) of telcos even for matters which are currently sub judice, ET reported.

 

In September, the Union Cabinet had a relief package for the sector which included a moratorium on payment of spectrum dues.

However, the companies have to pay interest on the dues during the moratorium period.

In addition, the government also scrapped Spectrum Usage Charge (SUC) for airwaves acquired in future spectrum auctions.

It had also cut BG requirements against statutory dues such as licensee fees had been cut by 80 percent and done away with the requirement of furnishing the financial instrument to secure installments of payments in upcoming auctions.

Further, the BGs which the telcos had furnished to cover for spectrum payments, which have been deferred for four years under the relief package, will be also returned, the ET report said, citing government officials.

In order to cover its deferment dues, the government would ask the companies to furnish the BGs a year before the concerned dues are up for payment, the officials added.

Of Vi and Airtel, DoT holds some Rs 35,000 cr in BGs. Of these, Airtel’s Rs 3,000 cr and Vi’s Rs 10,000 cr worth of BGs are for dues which was sub judice, the ET report said.

This comes as a big relief for cash-strapped Vodafone Idea which has about Rs 10,000 crore locked away in bank guarantees in matters which are currently sub-judice. The same is about Rs3,000 crore for Bharti Airtel, the ET report said.

The banks' capital pool will swell after the BGs are returned, allowing a telco like Vodafone Idea to get more loans as it seeks to invest in its 4G network to compete with stronger rivals Reliance Jio and Bharti Airtel and recover its subscriber losses.

According to the ET report, DoT had sought legal opinion on what is the right procedure to be followed for the return of BGs, especially those which are related to issues currently in court.

Since the motive behind the telecom relief package was to increase liquidity in the sector and give telcos funds to expand and invest in their business, the BGs pertaining to matters under subjudice are also being considered to be given back, the report added, citing a source.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.