Mumbai: State Bank of India has classified the loan accounts of debt-laden state-owned MTNL as sub-standard non-performing assets due to missed payments of instalments and interest since June 30, according to a regulatory filing by the telecom firm, media reports said.
As of September 30, the total outstanding on MTNL's loan account stood at Rs 325.52 crore, per an SBI letter dated October 1, which was shared by the company with the stock exchanges, PTI reported.
"State Bank of India (SBI) vide its letter dated October 1, 2024, has informed that Term Loan Accounts Number 36726658903 of MTNL has changed to NPA - Sub Standard category with effect September 28, 2024, due to non-payment of interest and instalment," MTNL was quoted as saying by PTI.
According to SBI’s letter, Rs 281.62 crore is overdue and needs to be cleared immediately to regularize the account. The public sector bank has also requested updates on the government’s assurance to clear MTNL's dues.
SBI has asked for details of several monetization projects MTNL is working on, including an agreement with NBCC to develop 13.88 acres of land into residential and commercial space in New Delhi.
The bank warned that it would be forced to take legal action against the state-owned telecom company if scheduled payments are not made.
According to the report, SBI stated, "...the bank will be constrained to institute legal proceedings for the recovery of the said entire loan, along with interest and take such other steps as may be available to the bank, including enforcement of securities without any further reference to you (MTNL) in the matter and entirely at your costs and consequences."
Several other banks, including Punjab National Bank and Union Bank of India, have taken action against MTNL for non-payment of dues. Union Bank of India has frozen all of MTNL’s accounts for outstanding payments, according to the PTI report.
The loss-making telecom company has total borrowings of Rs 7,873.52 crore from banks and financial institutions, while its overall debt stands at Rs 31,944.51 crore.
MTNL has requested Rs 1,151.65 crore from the government to cover interest payments on sovereign guarantee bonds for the current fiscal year.
The government allocated Rs 3,668.97 crore in the Budget for the payment of the principal on MTNL bonds.
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