NEW DELHI: The State Bank of India (SBI) has declared loans given to state-owned Mahanagar Telecom Nigam Limited (MTNL) as a sub-standard non-performing asset (NPA) due to default in re-payment.
According to a letter from SBI, MTNL’s total outstanding loan balance was at Rs 325.52 crore as of September 30, with Rs 281.62 crore overdue, requiring immediate payment to regularise the account. SBI emphasised that failure to settle the overdue amount will lead to a penal interest rate on the outstanding balance.
“Your attention is also drawn to the term that in case the overdue(s) are not so liquidated, a penal rate of interest is chargeable on such outstanding,” reads the letter.
This is not the first time MTNL has encountered issues with loan payments. Punjab National Bank downgraded the company to NPA in September, and both Union Bank of India and Bank of India have also classified MTNL loans as NPA.
Union Bank of India has frozen all MTNL’s accounts due to non-payment of dues. Currently, as of August 30, 2024, MTNL’s total reported debt stands at Rs 31,944.51 crore. Earlier in August, MTNL informed the stock exchanges that it had defaulted on bank loan payments amounting to Rs 422.05 crore.
This included Rs 155.76 crore owed to Union Bank of India, Rs 40.33 crore to Bank of India, Rs 40.01 crore to Punjab & Sind Bank, Rs 41.54 crore to Punjab National Bank, and Rs 4.04 crore to UCO Bank.
Meanwhile, MTNL has requested Rs 1,151.65 crore from the government to cover interest arising from sovereign guarantee bonds in the current fiscal year. In the budget, the finance ministry allocated Rs 3,668.97 crore for the payment of the principal amount of MTNL bonds.
SBI has also sought details regarding MTNL’s land monetisation plan and whether proceeds from such monetisation can be used to settle the dues.
In its letter, State Bank noted that MTNL has signed a Memorandum of Understanding (MoU) with NBCC to jointly develop a 13.88 acre land parcel on Pankha Road, New Delhi, and requested information about the MoU and whether the proceeds from the project will be utilized to clear outstanding debts.