Union Bank Freezes MTNL Accounts Over Non-Payment Of Dues
Union Bank's letter reiterated that the freezing was an automatic process and, thus, cannot be reversed without settling the overdue amount.
Union Bank of India has frozen all accounts of Mahanagar Telephone Nigam Ltd. following the non-payment of dues, according to an exchange filing by MTNL on Wednesday. The action was taken after MTNL's loan account slipped into non-performing-asset status, effective Aug. 12.
Union 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, according to the filing.
A letter from Union Bank dated Aug. 21 clarified that the freezing of accounts is a system-driven process and does not constitute coercive action. The bank also conveyed its inability to unfreeze the accounts unless the overdue amount is paid.
MTNL had requested the unfreezing of its current accounts maintained in various branches across Delhi and Mumbai, but Union Bank's letter reiterated that the freezing was an automatic process and, thus, could not be reversed without settling the overdue amount.
Shares of MTNL closed 0.40% lower at Rs 61.69 per share on the NSE, compared to a 0.14% advance in the benchmark Nifty.
