On Saturday, October 5, India’s largest public sector bank (PSB), State Bank of India (SBI), declared MTNL as a non-performing asset (NPA). MTNL owes Rs 325,528 crore to SBI.
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“The State Bank of India (SBI), vide its letter dated 01.10.2024, has informed that the term loan account of MTNL has been changed to NPA – Sub Standard category with effect from 28.09.2024 due to non -payment of interest and installments,” MTNL said in its bourse filing. READ THE DEPOSIT HERE
According to SBI, MTNL’s loan installment and interest payment on the term loan account worth Rs 325.53 crore was overdue on June 30, 2024 due to non-payment. Since 90 days have passed, the account category has been converted to “NPA-Sub Standard” with effect from September 28, 2024.
“The total outstanding amount of the account is Rs 325,52,82,396.20/- as on 30.09.2024. The total amount outstanding as on 30.09.2024 is Rs 281,62,37,053.45/-. In order to regularize the account, this amount is due with immediate effect and shall be paid forthwith,” SBI told MTNL in its letter.
This apart, SBI also sought clarification from MTNL on media reports claiming that the Department of Telecommunications (DoT) had said that there would be no default.
“Furthermore, we are yet to receive your notice on various media reports, in which it is stated that the government will pay MTNL dues, and the DOT has stated that there will be no default in payment. We request to provide us with the status of our term loan facility, in view of these media reports,” the State Bank of India said.
We once again invite your personal attention and request you to kindly make the scheduled payments to upgrade the account immediately, SBI told MTNL. If it fails to do so, the largest PSB said the bank would be forced to initiate legal proceedings to recover the entire said loan.
“In the event of failure to pay within the period stipulated above, the bank will be obliged to initiate legal proceedings for the recovery of the said loan in full plus interest and to take all other measures available to the Bank, including the realization security interests without any further reference to you in this matter and entirely at your expense and consequences,” SBI said.
MTNL’s debt
According to a report by Business Standard, MTNL declared a total debt of Rs 31,944.51 crore at the end of August 30, 2024. That month, it informed the NSE and BSE that MTNL had defaulted on repayments of its bank loan worth Rs 422.05 crore. LEARN MORE
First publication: October 8, 2024 | 10:52 a.m. STI
