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The DoT reduces the bank guarantee requirement of telecommunications operators by 80%

The government on Wednesday reduced the performance and financial bank guarantee (FBG) requirements of telecommunications service providers (TSPs) by 80%, in line with its latest Unified Access Services (UAS) license amendment for the streamlining of the bank guarantee (BG).

Under the amended standards, TSPs will be required to provide a performance bank guarantee of up to 44 crore for each service for the telecommunications license, compared to ₹ 220 crore under the previous rule.

Likewise, telecom operators will be required to provide a financial bank guarantee of up to ₹ 8.8 crore per circle compared to ₹ 44 crore previously.

“This amendment comes into force with immediate effect. This will be an integral part of the UASL agreement and the other “terms and conditions” remain the same, “the Ministry of Telecommunications said in the license amendment note.

Riders in advance

The rule will not apply in cases where the BG was provided on a court order or is the subject of a dispute, the DoT note said, adding that the rules would not apply to carriers. in liquidation.

He stated that any BG submitted with respect to the securitization of deferred spectrum tranches, including performance bank guarantees, will continue to be held by the licensor without any reduction.

“In case of multiple bank guarantees for all licenses / authorizations held, the license holder will have the option to submit BGs centrally at one location instead of the Licensed Service Areas (LSAs),” he said. -he adds.

This operation will release the liquidity that the telecom operators keep with the banks to supply the BGs.

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