State Bank of India has declared loan accounts of state-owned MTNL as sub-standard non-performing assets (NPAs) due to non-payment of instalments and interest since 30 June.

MTNL owed a total of Rs 325.52 crore as of 30 September, according to the SBI letter dated 1 October shared by the company with the stock exchanges.

"State Bank of India (SBI) vide its letter dated October 1, 2024, has informed that Term Loan Accounts Number 36726658903 of MTNL has changed to NPA - Sub Standard category with effect September 28, 2024, due to non-payment of interest and instalment," MTNL said.

Banks classify those accounts as NPA - Sub Standard category accounts whose default period is less than 12 months and have the potential to clear dues.

SBI, in the letter, said that Rs 281.62 crore is overdue, which needs to be paid immediately to regularise the account.

SBI has sought details of various monetisation projects on which MTNL is working, including its agreement with NBCC to develop 13.88 acres of land here into a residential and commercial space, PTI reported.

The public sector bank said that it will be forced to take legal action against the state-owned telecom firm if it fails to make scheduled payments.

"...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 (MTNL) in the matter and entirely at your costs and consequences," SBI said.

Several banks have taken action against MTNL for non-payment of dues, including Punjab National Bank and Union Bank.

Union Bank of India has frozen all accounts of MTNL for non-payment of dues.

The loss-making telecom firm has total borrowings of Rs 7,873.52 crore from banks and financial institutions, and the total debt of the company stands at Rs 31,944.51 crore.

MTNL has sought Rs 1,151.65 crore from the government for payment of interest arising out of sovereign guarantee bonds in the current fiscal.

Separately, the government, in the Budget, allocated Rs 3,668.97 crore for the payment of the principal amount of MTNL bonds.