DoT cuts bank guarantee requirement for telecom operators by 80%

The Department of Telecom­munications (DoT) on Tuesday announced slashing the performance and financial bank guarantee requirements of telecom operators by 80 per cent.

According to a licence amendment note, telecom operators will be required to provide a performance bank guarantee of up to Rs 44 crore for each service for the telecom licence compared to Rs 220 crore mandated under the old rule.

Similarly, telecom operators will need to provide a financial bank guarantee of a maximum Rs 8.8 crore per circle now, against the previous requirement of Rs 44 crore.

The move will benefit companies as their cash requirement would come down. It will unblock the cash of telecom operators that they keep with banks to furnish bank guarantees.