In Short:
The State Bank of India (SBI) has classified MTNL’s loan account as sub-standard due to missed payments since June. MTNL owes Rs 325.52 crore, with Rs 281.62 crore overdue. SBI may take legal action if payments aren’t made. MTNL’s total debt is Rs 31,944.51 crore. The government has allocated funds for MTNL’s bond payments amidst its financial struggles.
State Bank of India (SBI) has classified the loan accounts of the financially troubled state-owned Mahanagar Telephone Nigam Ltd (MTNL) as sub-standard non-performing assets (NPAs) due to prolonged non-payment of installments and interest since June 30. This development was disclosed by MTNL in a regulatory filing.
Loan Details
As of September 30, the total outstanding amount on the MTNL loan account was reported to be Rs 325.52 crore, as detailed in an SBI letter dated October 1, which MTNL shared with the stock exchanges. According to the letter, the Term Loan Account Number 36726658903 of MTNL was officially categorized as NPA – Sub Standard effective September 28, 2024, due to non-payment of interests and installments.
Payment Due
SBI has highlighted that an overdue amount of Rs 281.62 crore must be paid immediately to regularize the account. Furthermore, the bank requested an update regarding the government assurance for settling MTNL’s dues.
Future Actions
The public sector bank has expressed the need for clarity on various monetization projects that MTNL is currently pursuing, including an agreement with NBCC to develop 13.88 acres of land into both residential and commercial spaces. In light of the situation, SBI cautioned that it may resort to legal action against MTNL should the company fail to meet its scheduled payments, stating that it would be compelled to initiate legal proceedings for the recovery of the entire loan amount along with interest.
Additional Banking Actions
Several other banks, including Punjab National Bank and Union Bank of India, have also taken measures against MTNL due to non-payment of dues, with Union Bank specifically freezing all accounts of MTNL.
Debt Overview
MTNL is currently burdened with total borrowings amounting to Rs 7,873.52 crore from various banks and financial institutions, leading to a total debt of Rs 31,944.51 crore. In its efforts to manage these obligations, MTNL has sought Rs 1,151.65 crore from the government for interest payments related to sovereign guarantee bonds for the ongoing fiscal year. Additionally, the government allocated Rs 3,668.97 crore in the Budget for the repayment of the principal amount concerning MTNL bonds.
