 "SBI declares MTNL account as NPA: Share price down 8% today, 15% in 3 days")
MTNL share price declined 7.5 per cent to Rs 48.2 per share on the BSE in Tuesday's intraday trade. Including today's loss, MTNL share has tumbled 15.2 per cent in three days as against a 2 per cent dip in the benchmark BSE Sensex index during the period.
On Saturday, October 5, India's biggest public sector bank (PSB) State Bank of India (SBI) declared MTNL as a non-performing asset (NPA). MTNL owes Rs 325.528 crore to SBI.
"State Bank of India (SBI), vide its letter dated 01.10.2024, has informed that Term Loan Account of MTNL has been changed to NPA - Sub Standard category with effect from 28.09.2024 due to non- payment of interest and instalment," MTNL said in its stock exchange filing. READ FILING HERE
According to SBI, MTNL's loan Installment and Interest payment in the Term Loan account worth Rs 325.53 crore, had become overdue on June 30, 2024, due to the non-payment. Since 90 days have passed, the account category has been converted to 'NPA-Sub Standar' with effect from September 28, 2024.
"The Total outstanding in the account is Rs 325,52,82,396.20/- as on 30.09.2024. The total amount which is overdue as on 30.09.2024 is Rs 281,62,37,053.45/-. In order to regularise the account, this amount is due with immediate effect and is to be paid immediately," SBI told MTNL in its letter.
That apart, SBI also sought clarification from MTNL on media reports claiming that the Department of Telecommunications (DoT) has stated there will be no default.
"Further, we are yet to receive your advice on various media reports, where it is stated that the Government will pay MTNL dues, and DOT has stated there will be no default. We request to provide us with status of our term loan facility, in view of these Media reports," State Bank of India said.
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We once again draw your personal attention and request you to kindly make the scheduled payments immediately to upgrade the account, SBI told MTNL. If failed to do so, the largest PSB said the bank will be constrained to institute legal proceedings for the recovery of the said entire loan.
"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 without any further reference to you in the matter and entirely at your costs and consequences," SBI said.
MTNL's debt
According to a Business Standard report, MTNL reported a total debt of Rs 31,944.51 crore at the end of August 30, 2024. That month, it informed the NSE and BSE that MTNL had defaulted on bank loan payments worth Rs 422.05 crore. READ MORE