Government has initiated action on encashing the bank guarantees of private FM radio players in Mumbai, for failing to pay up their annual licence fee by the due date. While licencees in Delhi and Chennai have a stay against government encashing the bank guarantees, Mumbai players don’t have any legal protection. In Kolkata, there’s some ambiguity on whether government can encash the bank guarantee or not. In Mumbai, however, the High Court has said that government cannot cancel the licence of FM players.
The deadline for payment of the annual licence fee was April 29 for the metro players. In addition, the players got a grace period of seven days for making the payment. None of the players, including Entertainment Network India Ltd, Music Broadcast Pvt Ltd, Radio Today, Radio Mid-day, Hitz and Millenium, paid a penny.
The bank guarantee is equivalent to the first year’s licence fee. For Mumbai, it was the highest at Rs 9.75 crore; Delhi was next at Rs 7.12 crore; Chennai Rs 3.3 crore; and Kolkata Rs 1 crore. According to the FM radio policy, there’s a 15 per cent escalation every year in the licence fee. In all, operators across metros owe over Rs 100 crore to the government as licence fee for the year.
The controversy over licence fee payment began when private players sought an extension of deadline for the payment of licence fee. In effect, they wanted a fee waiver till a new FM radio policy is announced.