Government Returns ₹22,000 crores worth of Bank Guarantees to Telecom Companies

The Department of Telecommunications (DoT) provided major relief to telecom companies, Bharti Airtel and Vodafone Idea. It has released bank guarantees worth Rs. 22,000 held by it. As per a report by the Economic Times, an affidavit has been filed by the Department of Telecommunications in the apex court of India, informing that bank guarantees have been returned by it to Vodafone Idea and Airtel. In March, Vodafone Idea requested the Department to release its bank guarantees as the board of directors of the company was considering its fundraising plans. Vodafone Idea told that the adjusted gross revenue (AGR) and spectrum dues have been deferred by four years. Also, the government has the option to turn this into equity. Therefore, there is no requirement to hold back the bank guarantees for the same dues.

Out of the Rs. 22,000 crores of bank guarantees were released by the Department of Telecommunication, ₹15,000 crores returned to Vodafone Idea and ₹7,000 crore to Airtel. In its affidavit, DoT said: “Pursuant to the Cabinet decision and in view of the fact that VIL and BAL had opted for such moratorium on spectrum auction installments and no installment is due necessitating security in the form of financial bank guarantees till 13 months before the next payable installment post moratorium period, DoT has returned the existing bank guarantees.”