Going ahead with the decision to provide relief to telecom operators, the Department of Telecommunication has started returning bank guarantees to companies.
As part of this, the telecom department is releasing bank guarantees of Rs 20,000 crore issued by Bharti Airtel and Vodafone Idea.
Bharti Airtel will get back Rs 8,000 crore while Vodafone Idea will get back Rs 12,000 crore in bank guarantees.
The 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 funds they keep with lenders to furnish bank guarantees.