State Bank of India on Friday classified a term loan of Mahanagar Telephone Nigam Ltd. in the non-performing asset-sub standard category due to non-payment of interest and instalment.
The total outstanding in the term loan account is Rs 325.5 crore as on Sept. 30, while the amount overdue is Rs 281.6 crore. Since, 90 days have passed, the account category is NPA sub standard, SBI said in a letter to MTNL.
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.
The lender asked the struggling telco to make the scheduled payments immediately to upgrade the account, failing which it threatened to institute legal proceedings for the recovery of the entire loan along with interest.
Last month, Punjab National Bank downgraded MTNL to a NPA over non-payment of interest and instalment across multiple accounts with outstanding amount adding up to about Rs 441 crore while the overdue amount is over Rs 46 crore.
Union Bank of India in August froze all accounts of MTNL following the non-payment of dues. The bank notified the telecom company through a letter dated Aug. 21 that all of its accounts, including collection and current accounts, have been automatically frozen.
Mahanagar Telephone Nigam is a wholly owned subsidiary of Bharat Sanchar Nigam Ltd. and provides services in the metro cities of Mumbai and New Delhi. The company has struggled to compete in a market dominated by larger private rivals like Reliance Jio and Airtel.
MTNL share price closed 3% lower at Rs 55.16 per share on the NSE, compared to a 0.9% decline in the benchmark Nifty. The stock has advanced 84% in the last 12 months and 65% on a year-to-date basis.
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