SBI Classifies MTNL Account as NPA After ₹282 Crore Default

SBI has also sought MTNL's response to media reports where it is stated that government will pay MTNL dues, and the Department of Telecom assured there will be no default.

State Bank of India (SBI) has marked the loan accounts of the struggling state-owned company MTNL as non-performing assets because the company has not paid its instalments and interest since June 30. According to a letter from SBI dated October 1, MTNL's total outstanding loan was ₹325.52 crore as of September 30, as shared by the company in a filing with stock exchanges.

Banks classify those accounts as NPA - Sub Standard category accounts whose default period is less than 12 months and have the potential to clear dues. SBI, in the letter, said that ₹281.62 crore is overdue, which needs to be paid immediately to regularise the account. The public sector bank has sought the status of the government assurance to clear MTNL dues.

SBI has sought details of various monetisation projects on which MTNL is working, including its agreement with NBCC to develop 13.88 acres of land here into a residential and commercial space. The public sector bank said that it will be forced to take legal action against the state-owned telecom firm if it fails to make scheduled payments.

The loss-making telecom firm has total borrowings of ₹7,873.52 crore from banks and financial institutions, and the total debt of the company stands at ₹31,944.51 crore. MTNL has sought ₹1,151.65 crore from the government for payment of interest arising out of sovereign guarantee bonds in the current fiscal. Separately, the government, in the Budget, allocated ₹3,668.97 crore for the payment of the principal amount of MTNL bonds.