State-run telecom operator MTNL's (Mahanagar Telephone Nigam Limited) bank accounts have been frozen by the Union Bank of India. The move from Union Bank is due to non-payment of dues by MTNL. Much recently, MTNL sought government's help to pay interest on bond dues. The state-run telco's financial situation is extremely poor due to a diminishing business.
MTNL said, "This is to inform you that Union Bank of India vide its Letter... dated August 21, 2024 has informed MTNL that its account has slipped to NPA with effect from August 12, 2024 due to which all accounts of MTNL with Union Bank of India have been freezed automatically."
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MTNL has defaulted on bank loan payments of about Rs 422.05 crore. From the Union Bank of India, the bank defaulted on a payment of Rs 155.76 crore. From other banks including the State Bank of India (SBI), Bank of India, Punjab & Sind Bank, Punjab National Bank, and UCO Bank, MTNL has defaulted on payments of Rs 140.37 crore, Rs 40.33 crore, Rs 40.1 crore, Rs 41.45 crore, and Rs 4.04 crore, respectively.
The total debt of MTNL stands at Rs 31,944.51 crore. MTNL's borrowings from banks and financial institutions was Rs 7,873.52 crore. MTNL has sought Rs 1,151.65 crore from the goverment for payment of interest arising out of sovereign guarantee bonds. Separately, the government has allocated Rs 3,668.7 crore for the payment of principal amount of MTNL bonds.
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Bharat Sanchar Nigam Limited (BSNL) is soon going to overtake entire MTNL operations. Currently, the debt restructuring exercise is happening, and once that is concluded, BSNL will overtake the operations. It is worth noting that BSNL already operates the mobile networks of BSNL in Mumbai and Delhi. This move will enhance the mobile network and home broadband experience of MTNL users.
