MTNL defaults again: Rs 8,659 crore owed to public sector banks

The state-owned telecom provider, Mahanagar Telephone Nigam Limited (MTNL), has once again defaulted on its loan repayments. This time, a consortium of public sector banks has been left with unpaid dues amounting to Rs 8,659 crore (USD 990.48 million). The default includes a principal amount of Rs 7,794 crore and overdue interest of Rs 865 crore owed to lenders, including Union Bank of India, Bank of India, Punjab National Bank, and the State Bank of India. 

MTNL has long struggled to generate sufficient revenue from its services and has faced persistent difficulties in expanding its subscriber base. For years, the company has relied heavily on government support to stay afloat. Given its current financial distress and substantial debt burden, the likelihood of meeting its repayment obligations on time remains slim.

MTNL has defaulted on loan repayments amounting to Rs 3,768.37 crore to Union Bank of India, Rs 2,455.01 crore to Indian Overseas Bank, Rs 1,131.54 crore to Bank of India, Rs 478.26 crore to Punjab National Bank, Rs 363.43 crore to State Bank of India, Rs 276.08 crore to UCO Bank, and Rs 186.40 crore to Punjab & Sind Bank.The loan defaults occurred between August 2024 and February 2025.

This is not the first time MTNL has defaulted. As of 31 July 2025, the telecom operator had total outstanding liabilities of Rs 34,577 crore  (USD 3.96 billion). This debt includes loans from the Department of Telecommunications (DoT) and sovereign-guaranteed bonds.