Telecom department starts returning bank guarantees to Bharti Airtel, Vodafone India

The Department of Telecom­munications (DoT) has so far returned bank guarantees worth Rs 3,500 crore issued by Bharti Airtel.

The process of returning bank guarantees is likely to be completed before December 31.

The DoT in October had announced its decision to reduce the performance and financial bank guarantee requirements of telcos by 80 percent.

Under the new rule, as per a licence amendment note, the telecom firms are required to provide a performance bank guarantee of up to Rs 44 crore for each service for the licence. The old rule had mandated Rs 220 crore as performance bank guarantee.

Similarly, for a financial bank guarantee, telecom operators now need to provide a maximum Rs 8.8 crore per circle against the Rs 44 crore earlier.

The decision came in favour of telcos as it reduces their cash requirement while unblocking the cash they keep with lenders to furnish bank guarantees.