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NEW DELHI: The government has returned about Rs 9,000 crore worth of bank guarantees to Bharti Airtel<\/a>, Reliance Jio Infocomm (Jio) and Vodafone Idea<\/a> (Vi), in keeping with its decision to reduce the need for such guarantees against statutory dues as part of its relief package for the debt laden telecom sector.
The bank guarantees are submitted to the Department of Telecommunications<\/a> (DoT) and in case statutory dues like license fees and spectrum usage charges (SUCs) are not paid on time, then the government has the option of invoking them.
“Airtel has received about Rs 4,000 crore over the last few days,” a person aware of the developments said. Vi has received about Rs 2,500 crore.
The move to cut bank guarantee requirements by 80% against statutory dues such as license fee will benefit Vi the most.
Their return will add to the banks’ capital pool, allowing a cash-strapped telco like Vi to access more loans as it seeks to invest in its 4G network to better compete with stronger rivals Jio and Airtel and stem subscriber losses.
The telcos had asked for this requirement to be scrapped since they add to the financial stress in the sector, since banks have to be convinced to replenish them as they eat into the capital pool.
“Last month, Jio got Rs 2,700 crore of bank guarantees which was paid against license fee,” another senior telecom executive said.
All three telcos did not respond to ET's queries.