SBI mark down MTNL's term loan account to NPA over non-payment of dues

by Psu Connect
Date: 05-10-24
Ministry of Communications

The bank also sought clarification on the current status of the Land Monetization Plan that was provided 'with granular details, along with year-wise cash flows, very recently.

New Delhi: The State Bank of India has downgraded MTNL's term loan account to NPA effective from September 28, citing non-payment of interest and installment.

MTNL shared the letter from SBI that stated the total outstanding in the account at over Rs 325.52 crore as of September 30, with an overdue amount of Rs 281.62 crore needed to regularize the account. "This amount is due with immediate effect and to be paid immediately," the letter by SBI said.

"Since 90 days have passed now account category is NPA Sub Standard with effect on 28.09.2024," SBI said in its communication to the telecom service provider, asking for immediate payment to upgrade the account.

The bank has asked MTNL for clarification regarding news reports that claim the Centre will pay MTNL dues, and the Department of Telecommunications (DoT) has stated that there will be no default. In a letter dated October 1 and shared by MTNL with the stock exchange on October 4, SBI requested the status of their term loan facility in light of these media reports.

The bank also sought clarification on the current status of the Land Monetization Plan that was provided 'with granular details, along with year-wise cash flows, very recently'.

"In case of default of payment within the period stipulated above, 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," said the SBI letter.

Other lenders such as PNB, Union Bank of India, and Bank of India have classified MTNL's account as an NPA. Collectively, banks have an exposure of Rs 7,925 crore to MTNL.