BSNL Subsidiary MTNL Defaults On Rs 8,585-Crore Loan Repayment

MTNL's Financial Woes: Telecom operator Mahanagar Telephone Nigam Ltd (MTNL) on Tuesday informed that the wholly-owned Bharat Sanchar Nigam Limited (BSNL) subsidiary defaulted in paying principal, and interest payments totalling Rs 8,584.9 crore payable to seven banks as of June 2025.

The impacted public sector lenders are State Bank of India, UCO Bank, Indian Overseas Bank, Punjab & Sind Bank, and Bank of India, Punjab National Bank, and Union Bank of India, as per an BSE Sensex exchange filing dated July 15, 2025. 

The largest defaulted amount was payable to Union Bank at Rs 3,733.2 crore, followed by IOB at Rs 2,434.1 crore. MTNL owes Rs 1,121.1 crore to BOI, Rs 474.7 crore to PNB and Rs 363.4 crore to SBI. Further the telecom firm catering to metro cities deafualted on Rs  Rs 273.6 crore to UCO Bank and Rs 184.8 crore to Punjab & Sind Bank.

The New-Delhi-headquartered company's financial trouble comprises of both short-term and long-term borrowing tallies upto Rs 34,484 crore. This includes Rs 8,585 crore in bank laons, Rs 1,828 crore in loans from the Department of Telecommunications (DoT) to service SG bond interest obligations, and Rs 24,071 crore in sovereign guarantee bonds.

MTNL's, which provides telecom services in metro cities of Mumbai and New Delhi, and the island nation of Mauritius, Africa, downward spiral in terms of the company's financial health has larger consequences, as it ends up affecting the timely payments to vendors, salaries for employees and dues to pensioners. 

Meanwhile, the company's share price continues to remain volatile, and are often influenced merely by speculation around potential mergers or government bailouts than by core operational performance.

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The share price of MTNL ended at Rs 49.92 per share on the BSE Sensex bourse on Tuesday, July 15 2025.