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Tribunal asks DoT to release Rs 2,000 crore bank guarantee to RCom

Tribunal asks DoT to release Rs 2,000 crore bank guarantee to RCom

Tribunal asks DoT to release Rs 2,000 crore bank guarantee to RCom
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By CNBC-TV18 Feb 4, 2019 12:20:57 PM IST (Published)

In a relief to Reliance Communications (RCom), the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) directed the Department of Telecommunications to release Rs 2,000 crore bank guarantee provided by the company.

In a relief to Reliance Communications (RCom), the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) directed the Department of Telecommunications to release Rs 2,000 crore bank guarantee provided by the company.

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RCom had provided the bank guarantees in 2016 to secure the payment of spectrum-related charges. The company had approached the tribunal contesting the demand for bank guarantees for one-time spectrum charges (OTSC).
The amount was paid in cash for liberalisation of RCom’s spectrum, which is now being sold to Reliance Jio Infocomm .
The telecom tribunal on Monday held that OTSCs levied by the DoT were invalid.
The Tribunal order will reduce non-funded exposure of banks by Rs 2,000 crore and help in accelerating RCom’s asset monetisation programme for Rs 25,000 crore, which was announced earlier.
The development comes a day after the company decided to file for bankruptcy in a bid to resolve matters related to its debt of over 40,000 crore.
At 12:15pm, shares in the company were down 36 percent at Rs 7.45 on the Bombay Stock Exchange.
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