Amid Mahanagar Telephone Nigam Ltd 's mounting debt and multiple loan defaults, cabinet secretary TV Somanathan has called a meeting with the heads of key public sector banks on May 16 to prevent immediate adverse action against the state-run telecom company, a source has told Moneycontrol.
The participants will likely look for a stop-gap arrangement to prevent MTNL's accounts from being declared non-performing assets (NPAs). With such high exposure, lenders, too, would be keen to avoid provisioning hits, the source said.
Economic affairs secretary Ajay Seth, financial services secretary M Nagaraju, expenditure secretary V Vualnam and telecom secretary Neeraj Mittal, too, are expected at the meeting.
Massive default
In an April 19 regulatory filing, MTNL, operates primarily in Delhi and Mumbai,said it defaulted on loans worth Rs 8,346.24 crore taken from seven public sector banks. The defaults occurred over a seven-month period — between August 2024 and February 2025.
The telecom PSU reported a total debt obligation of Rs 33,568 crore as on March 31, 2025, pointing to a severe financial crisis despite government interventions.
According to the filing, the largest defaults includes Rs 3,633.42 crore to Union Bank of India, Rs 2,374.49 crore to Indian Overseas Bank, Rs 1,077.34 crore to Bank of India, Rs 464.26 crore to Punjab National Bank, Rs 350.05 crore to State Bank of India, Rs 266.30 crore to UCO Bank and Rs 180.3 crore to an unidentified lender.
The defaults cover both principal and interest payments.
The company’s total liabilities include Rs 8,346 crore in bank loans, Rs 24,071 crore in sovereign guarantee (SG) bonds and Rs 1,151 crore in loans from the department of telecommunications (DoT) to service SG bond interest payments.
MTNL has been struggling with declining revenues and high operating costs for years, relying on government support to stay afloat. The government has infused over Rs 3.23 lakh crore to revive MTNL and BSNL, which provides services across India, excluding Delhi and Mumbai, through three separate packages.
At 11.12 am, the MTNL stock was trading at RS 41.51 on the National Stock Exchange, up 0.22 percent from the previous close.
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