Big government company defaults on massive loan of Rs 8300 crore; Modi govt steps in to…, its name is…

MTNL bankruptcy update: In a significant move aimed at saving the historic Mahanagar Telephone Nigam Limited (MTNL) from bankruptcy, the central government of India led by PM Modi has taken a big step. For those unversed, MTNL has been continuously defaulting on loans despite getting a bailout package from the government. In the recent update on the public sector telecommunications company, it has been reported that a meeting will be held with government banks on May 16 under the leadership of Cabinet Secretary TV Somanathan which will be decided that MTNL’s account will not declared as (Non Performing Asset) NPA despite loan default. Here are all the details you need to know about how the government is planning to save MTNL from bankruptcy.

MTNL defaults on over Rs 8,300 crore loan repayments, debt surges

MTNL earlier informed in April that it has defaulted on loan repayments of over Rs 8,300 crore to multiple banks, as per a report carried by news agency IANS.

The telecom firm informed in its stock exchange filing that it had failed to repay dues to several public sector banks, including Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank, and Indian Overseas Bank.

Details from MTNL filing

The filing also disclosed that MTNL defaulted on both principal and interest payments in March 2025. The total outstanding principal amount is Rs 7,794.34 crore, while the interest overdue stands at Rs 551.90 crore.

“The total outstanding principal amount stands at Rs 7,794.34 crore, while the interest due is Rs 482.97 crore,” MTNL said in its filing.

The filing included a detailed breakdown of defaults with each lender. Union Bank of India is the largest creditor, with MTNL owing it over Rs 3,633 crore, followed by Indian Overseas Bank (Rs 2,374 crore), and Bank of India (Rs 1,077 crore).

(With inputs from agencies)

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