The Telecom Regulatory Authority of India (TRAI) is actively pushing for amendments to the TRAI Act, 1997, aiming to bolster its financial enforcement capabilities. According to a report by LiveMint (July 24, 2025), the proposed changes would empower TRAI to impose binding penalties, demand bank guarantees from telecom operators, and independently recover dues—authority it currently lacks.
Current Limitations Hampering Enforcement
While TRAI oversees service quality, tariffs, and consumer protection, officials say its limited legal authority hampers effective enforcement. At present:
- TRAI cannot attach bank accounts or properties.
- It lacks the power to impose binding financial penalties.
- It must rely on the Department of Telecommunications (DoT) for critical actions like licence issuance and revocation.
For serious violations, TRAI’s only recourse is to initiate criminal proceedings through a magistrate—a rarely used and cumbersome process.
Key Proposal: Bank Guarantee Requirement
A central demand in TRAI’s proposal is the ability to mandate bank guarantees from telecom operators. These would serve as financial safeguards to ensure compliance and could be invoked if penalties go unpaid. Officials believe this would compel operators to take regulatory obligations more seriously.
Comparison with SEBI Highlights Power Gap
In contrast to TRAI, regulators such as the Securities and Exchange Board of India (SEBI) can independently issue binding orders and enforce penalties. Former TRAI advisor Satya N Gupta noted that, unlike other countries, India’s telecom licensing and policymaking remain with the government—not the regulator—leaving TRAI with limited control.
Recurring Compliance Challenges
TRAI’s push stems partly from repeated compliance issues. Notably, it imposed over ₹140 crore in financial disincentives on telcos for failing to curb spam. These penalties were challenged in court, delaying enforcement.
“Operators often delay or ignore requests for data, and current penalties aren’t strong enough to hold them accountable,” one official told LiveMint.
DoT Yet to Act on TRAI’s Recommendations
In February, TRAI had recommended that the DoT include bank guarantees as part of telecom licensing terms to secure regulatory compliance and dues. However, the DoT has not yet accepted these proposals, despite mounting concerns.
TRAI is preparing a formal proposal for legal amendments, which will be submitted to the Ministry of Communications. If accepted, these changes could significantly enhance the regulator’s ability to enforce compliance and discipline within India’s telecom sector.