Indian banks, spearheaded by State Bank of India, are poised to re-evaluate their stance on extending fresh credit to Vodafone Idea (Vi) following a significant relief package approved by the government. The Department of Telecommunications (DoT) has frozen Vi's Adjusted Gross Revenue (AGR) dues, amounting to ₹87,695 crore for the period between FY 2006-07 and FY 2018-19, as of December 31, 2025. This crucial government intervention involves a staggered repayment schedule for these frozen dues, extending over 16 years until March 2041. Under the revised plan, Vodafone Idea will make annual payments of ₹124 crore for six years (March 2026-2031) and ₹100 crore annually for the subsequent four years (March 2032-2035). The remaining balance will be repaid in equal annual installments from March 2036 to March 2041, pending a final reassessment by a DoT-appointed committee. This effectively defers nearly 95% of Vi's AGR liability for the next decade, providing much-needed breathing room. Previously, banks were reluctant to lend to Vodafone Idea due to its substantial debt burden, including approximately ₹1.2 lakh crore in spectrum dues, and a history of strained cash flows. The AGR relief significantly alters the company's liability profile, making it a more attractive proposition for both debt and equity investors. Vodafone Idea's prior equity raise of over ₹20,000 crore in April 2024 has been fully utilized, necessitating fresh capital for vital network investments, including 4G expansion and the rollout of 5G services, to enhance its competitiveness in the Indian telecom market. Analysts anticipate this relief will expedite the company's efforts to secure bank funding, which is essential for its long-term viability and growth.