Union Bank Freezes MTNL’s Accounts Over Non-Payment of Dues, Check SBI and other Banks’ Overdue
Union Bank of India has taken a drastic step by freezing all accounts of the state-run telecom company MTNL. This action was confirmed through a regulatory filing made on Wednesday.
What Happened?
On August 21, 2024, Union Bank of India sent a letter to MTNL, notifying the company that its accounts would be frozen. The reason for this severe action is MTNL’s failure to repay its loans. According to the letter, MTNL’s account has been categorized as a Non-Performing Asset (NPA) effective from August 12, 2024. This classification led to the automatic freezing of all MTNL accounts with the bank.
The Financial Struggles of MTNL
MTNL, already in financial trouble, had earlier reported to the stock exchanges that it defaulted on bank loan payments amounting to ₹422.05 crore. The details of these defaults include:
- ₹155.76 crore owed to Union Bank of India
- ₹140.37 crore owed to State Bank of India
- ₹40.33 crore owed to Bank of India
- ₹40.01 crore owed to Punjab & Sind Bank
- ₹41.54 crore owed to Punjab National Bank
- ₹4.04 crore owed to UCO Bank
In total, MTNL had borrowed ₹5,573.52 crore from these banks. The company’s overall debt stands at a staggering ₹31,944.51 crore, with total borrowings of ₹7,873.52 crore from various banks and financial institutions.
Government Support
To address its financial woes, MTNL has requested ₹1,151.65 crore from the government to cover the interest on sovereign guarantee bonds for the current fiscal year. Additionally, the government has allocated ₹3,668.97 crore in the Budget to repay the principal amount of MTNL’s bonds.
This situation highlights the ongoing financial challenges faced by MTNL and the critical role of government support in managing its debt crisis.
