The State Bank of India has downgraded MTNL's term loan account to NPA with effective from September 28, citing non-payment of interest and instalment.
MTNL shared the letter from SBI that stated the total outstanding in the account at over Rs 325.52 crore as on 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 the immediate payment to upgrade the account.
The bank also sought clarity from MTNL regarding news reports stating that the Centre 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," said the SBI letter dated October 1 and shared by MTNL with the stock exchange on October 4.
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'.
MTNL had recently signed an MoU with NBCC to jointly develop a 13.88 acre land parcel in New Delhi into a residential and commercial space. The lender has also sought details of the MoU and
asked if the proceeds from the projects will be utilized to clear the outstanding.
SBI also flagged off the possibility of legal proceedings for recovery should there be a default of payment.
"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.
Already, other lenders such as PNB, Union Bank of India and Bank of India have classified the account of MTNL as an NPA. Collectively, banks have an exposure of Rs 7,925 crore to MTNL.
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