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Government telecom company Mahanagar Telephone Nigam Limited (MTNL) has not been able to repay the loan installment to State Bank of India (SBI) on time, due to which the bank has declared the company's account as a non-performing asset (NPA). According to the exchange filing of the telecom company, in a letter to MTNL, SBI said that the loan installment and interest payment for the term loan, which became overdue on June 30, 2024, was not paid for more than 90 days, due to which it has been downgraded to the NPA category from September 28, 2024.
These banks also made the account NPA Earlier, Union Bank of India, Bank of India and Punjab National Bank had also downgraded MTNL's account to the non-performing asset (NPA) category. MTNL had proposed a repayment plan to settle about 40 per cent of its outstanding dues, which is a reduction of 60 per cent, but its lenders rejected it in June. SBI warns of legal action SBI has now warned MTNL that if the dues are not paid, it may have to take legal action to recover the dues. "If there is a default in payment within the stipulated period, the bank will be compelled to initiate legal proceedings for recovery of the entire loan amount along with interest and take such other steps as may be available to the bank," the letter said. SBI has raised concerns about MTNL's ability to meet its financial liabilities, especially in light of media reports that the government may intervene to recover MTNL's dues. In view of these reports and the Department of Telecommunications' (DoT) statement that MTNL will avoid default, the bank is awaiting clarification from MTNL on the status of the term loan facility.
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