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 DoT slashes financial institution assure requirement for telcos by 80%
January 8, 2022

DoT slashes financial institution assure requirement for telcos by 80%

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The division of telecom has revised the financial institution assure requirement for telecom operators to twenty%, successfully slashing the requirement by nearly 80%, a notification by the regulator stated.

This choice will end in increased money flows for telcos like Vodafone Thought and Bharti Airtel. It’s going to additionally give extra leeway for banks to lend extra to the debt-ridden corporations sooner or later.

Below the amended norms, telecom operators will likely be required to supply a efficiency financial institution assure of as much as ₹44 crore for every service for the telecom licence in comparison with ₹220 crore mandated below the previous rule.

Equally, telecom operators might want to present a monetary financial institution assure of most ₹8.8 crore per circle now, towards the earlier requirement of ₹44 crore.

The rule is not going to be relevant in instances the place financial institution ensures have been furnished resulting from any courtroom order or are topic to any litigation, the licence modification observe stated. The foundations is not going to apply to telecom operators, who’re at present going by way of the liquidation course of.

Nonetheless, the amended rationalisation of financial institution ensures are topic to revisions. As an illustration, the prevailing financial institution ensures furnished or required resulting from any courtroom order or litigation will proceed.

In a sequence of reforms to ease monetary burden on the telecom sector, the federal government has additionally earlier amended licence norms to rationalise the rate of interest for delayed cost of licence price.

Earlier immediately, the federal government notified its choice to allow 100% overseas direct funding (FDI) below computerized route within the struggling telecom sector.

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In accordance with reviews, the federal government can be contemplating withdrawing authorized instances towards telecom corporations, involving disputes of about ₹40,000 crore.

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