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Punjab and Sind Bank (PSB) has officially declared that the accounts of Mahanagar Telephone Nigam Limited (MTNL) have been classified as Non-Performing Assets (NPA) effective October 8, 2024, in compliance with Regulation 30 of SEBI (LODR), 2015.
“In compliance of Regulation 30 of SEBI (LODR), 2015, this is to inform you that Punjab and Sind Bank (PSB) vide its letter dtd. 16.10.2024 has informed that Accounts of MTNL has turned into NPA with effect 08.10.2024,” read a statement released by MTNL on Thursday.
SBI classifies MTNL a/c as sub-standard NPA
Previously, State Bank of India (SBI) classified that the loan accounts of the financially troubled state-owned MTNL have been termed as sub-standard non-performing assets due to missed payments of both instalments and interest since June 30, according to a regulatory filing by the telecom firm. As of September 30, the outstanding amount on MTNL’s loan account stood at Rs 325.52 crore, as detailed in an SBI letter dated October 1 shared with stock exchanges.
“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 had stated.
The public sector bank is also seeking updates regarding the government’s assurance to clear MTNL’s dues. Additionally, SBI has requested information on various monetization initiatives MTNL is pursuing, including a partnership with NBCC to develop 13.88 acres of land into residential and commercial spaces.
SBI warned that it may have to resort to legal action against MTNL if the company fails to make the required payments. “…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,” SBI indicated.
Trouble mounts due to unpaid dues
Other banks, including Punjab National Bank and Union Bank, have also taken action against MTNL for unpaid dues, with Union Bank freezing all of MTNL’s accounts.The loss-making telecom company has accumulated total borrowings of Rs 7,873.52 crore from banks and financial institutions, contributing to an overall debt of Rs 31,944.51 crore.
MTNL is seeking 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 government allocated Rs 3,668.97 crore for the repayment of the principal amount on MTNL bonds.
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