Bank Guarantees for OSPs — How much? 30K or 1 cr?

One of the more complicated aspects of OSP compliance is: how much do we really need to pay as Bank Guarantee? Different consultants give different estimates, based on their own experiences and understanding of the regulations. And as usual, with OSP, the DoT regulations are beginning to show their age, leaving lots of grey areas that get interpreted differently by different TERM cell officers. But with this article, we aim to clarify at least what is documented by the regulation, and provide guidance on how to approach the grey areas.

To understand how to calculate the bank guarantee required by the DOT, you need to answer the following questions:

• Are you a single site or multi-site OSP?
• Are you domestic or international OSP or both?
• Do you use separate infrastructure for each site or share the same infrastructure?
• Do you employ Work From Home agents or do they operate from office only?

Note that certain questions are irrelevant — for example, do you operate multiple sites in a single circle? This is because the bank guarantee requirements are focused on sites and completely ignore circles!

To simplify reference and lookup for you, we have created a nice little table that captures a huge number of use cases when it comes to bank guarantees. Use this table to check up if you need a give the DoT a bank guarantee, how much you need to give, or if you need to give at all! In one recent case, our analysis showed that a company was overpaying the government Rs 6 Cr in bank guarantees alone! We are now working with them to fix their paperwork accordingly.

If you want us to undertake an audit of your OSP infrastructure, get in touch with us! You can drop off an email to sales@assertion.cloud.

And now, without further ado, the table you want to see!

Click here to download.