The State Bank of India (SBI) has labelled the loan accounts of MTNL as “sub-standard” non-performing assets (NPA) due to missed payments since June 30. MTNL disclosed this information in a regulatory filing, sharing details of the SBI letter dated October 1, 2024.
MTNL’s Debt Situation
As of September 30, MTNL owes ₹325.52 crore, and SBI informed the telecom firm that its term loan accounts were moved to the NPA sub-standard category, effective from September 28, 2024. This classification applies to accounts where the default period is less than 12 months but still has potential for recovery.
SBI’s Demand for Payment and Government Assurance
SBI has demanded the immediate payment of ₹281.62 crore to regularise the account and has also sought updates on government assurances to help clear MTNL’s dues. The bank asked for details on MTNL’s monetisation projects, including the agreement with NBCC to develop land into residential and commercial spaces.
Legal Action Threatened by SBI
SBI warned that if MTNL fails to make scheduled payments, the bank will be forced to take legal action to recover the loan, along with interest. This may include enforcing securities and other measures without further notice to MTNL.
Other banks, including Punjab National Bank and Union Bank of India, have also taken action against MTNL for non-payment of dues. Union Bank has frozen all of MTNL’s accounts due to unpaid debts.
MTNL’s Total Debt and Government Support
MTNL currently has total borrowings of ₹7,873.52 crore from banks and financial institutions, with its total debt standing at ₹31,944.51 crore. The telecom firm has requested ₹1,151.65 crore from the government to cover interest payments on sovereign guarantee bonds. Separately, the government has allocated ₹3,668.97 crore in the budget for payment of the principal amount of MTNL bonds.
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