Union Bank Freezes MTNL Accounts Over Loan Default

Union Bank of India has frozen all accounts of state-run telecom company MTNL due to non-payment of loans. The action was informed to the company on August 21, and MTNL's account was declared an NPA effective August 12. MTNL has defaulted on significant loans from multiple banks.

Union Bank of India has taken action to freeze all accounts of the state-run telecom enterprise MTNL following non-payment of dues, according to a regulatory filing released on Wednesday.

Union Bank notified MTNL on August 21 that its accounts were frozen due to non-payment of loans. This development emerged after MTNL's account was classified as a non-performing asset (NPA) effective August 12, 2024.

Earlier this month, MTNL revealed defaults on bank loan payments amounting to Rs 422.05 crore. The company's substantial borrowings total Rs 31,944.51 crore, with Rs 1,151.65 crore sought from the government to manage interest on sovereign guarantee bonds.

(With inputs from agencies.)