MTNL bank default hits ₹9,654 crore in 2026 filing

Key disclosure: MTNL reports continuing bank-loan defaults

Mahanagar Telephone Nigam Limited (MTNL) has disclosed continued defaults on principal instalments and interest payments to a consortium of seven public sector banks. The disclosures were made under SEBI’s requirements for listed entities to report defaults on borrowings, including revolving facilities like cash credit.

Across the summaries provided, MTNL’s reported default amounts vary by reporting date and disclosure snapshot. The numbers cited range from about ₹8,585 crore to ₹9,574.61 crore, with a separate filing stating ₹9,654.25 crore as of August 31, 2026. One disclosure also cited total outstanding obligations of ₹9,263 crore to the seven banks as of March 31, 2026.

What MTNL said in its August 31, 2026 filing

MTNL’s disclosure dated August 31, 2026, states it has defaulted on principal and interest payments to the following lenders: Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank, and Indian Overseas Bank.

In the same disclosure, MTNL reported a total outstanding (O/s) default amount of ₹9,654.25 crore across the seven banks. It also disclosed a break-up of overdue components: overdue interest of ₹1,859.91 crore and overdue principal of ₹2,195.72 crore.

NPA dates for each lender, as disclosed

The filings list when each bank account was classified as an NPA. The disclosed NPA dates are:

• Union Bank of India (UBI): August 12, 2024
• Bank of India (BOI): September 4, 2024
• Punjab National Bank (PNB): September 9, 2024
• State Bank of India (SBI): September 28, 2024
• UCO Bank: September 28, 2024
• Punjab and Sind Bank (PSB): October 8, 2024
• Indian Overseas Bank (IOB): February 3, 2025

Separately, a summary notes that MTNL disclosed defaults of ₹9,188 crore as of February 28, 2026, with accounts classified as NPAs between August 2024 and February 2025.

How exposure is distributed across lenders

In the disclosures and summaries, Union Bank of India is consistently referenced as the largest lender. One summary states MTNL’s defaults totalled ₹9,263 crore with UBI the single largest creditor, and another states UBI exposure at ₹4,042.97 crore within a ₹9,263 crore total.

For the August 31, 2026 disclosure, MTNL’s bank-wise outstanding amounts are explicitly stated for several lenders, including UBI at ₹4,213.06 crore and IOB at ₹2,735.35 crore, alongside figures for BOI, PNB, and SBI.

Table: default totals across different disclosure dates

Table: bank-wise outstanding defaults as of July 31, 2026

(Amounts converted from INR million to ₹ crore)

Wider balance-sheet context: debt, bonds, and DoT support

Beyond bank borrowings, disclosures also cite MTNL’s broader debt position. One summary states MTNL’s total debt reached ₹34,938 crore as of September 30, including ₹24,071 crore of sovereign guaranteed bonds and a ₹2,061 crore loan from the Department of Telecommunications (DoT).

Another disclosure notes that MTNL had reported defaults and overdue obligations of ₹37,223 crore in July, comprising ₹9,495 crore in bank loans, ₹24,071 crore in sovereign guaranteed bonds, and ₹3,657 crore in DoT loans taken to service bond interest. A separate line also places MTNL’s total financial indebtedness at ₹37,475 crore, indicating continued high leverage and tight liquidity.

Liquidity signals: escrow requirement and self-funded bond interest

A key operational detail in the disclosures is MTNL’s escrow mechanism for servicing interest on sovereign guaranteed bonds. The company is required to maintain funds in an escrow account with Bank of India at least 10 days before the scheduled semi-annual interest payment date.

The disclosures also state MTNL has begun funding interest payments on its sovereign guaranteed bonds from its own resources and has cleared a portion of long-pending vendor liabilities. At the same time, its annual-report disclosures indicated it was unable to service bond interest and principal from its own resources from July 2024, requiring the government to fund the escrow account for scheduled payments.

Corporate compliance filings alongside the default disclosures

Apart from debt-related filings, MTNL also submitted a confirmation certificate from its registrar and share transfer agent (RTA) Beetal dated 05-10-2026, confirming dematerialisation and compliance with Regulation 74(5) for the quarter ended 30-09-2026.

The company also reported the voting results of its 40th AGM, where all six resolutions passed at the meeting held on 30 September 2026, with the filing dated 1 October.

Market impact and why the disclosures matter

The disclosures consolidate bank-level and instrument-level stress into a single, SEBI-mandated default reporting format, which is closely tracked by investors and lenders. The repeated reporting of defaults across multiple dates, along with NPA classifications starting in August 2024, highlights the duration of repayment stress.

For lenders, the filings provide updated outstanding and overdue break-ups by bank, which matter for recovery planning and provisioning. For shareholders and bondholders, details like escrow-funding requirements and the shift toward self-funded interest payments are relevant indicators of near-term liquidity management, even as the overall debt and overdue obligations remain large in absolute terms.

Conclusion

MTNL’s latest filings show continuing defaults on bank loans across seven PSU banks, with reported outstanding default amounts moving from ₹9,188 crore (Feb 28, 2026) to ₹9,654.25 crore (Aug 31, 2026). Alongside the bank-loan stress, the company’s disclosures also place its broader debt burden in focus, including sovereign guaranteed bonds and DoT-linked funding arrangements. The next key updates are likely to come through subsequent SEBI default disclosures and periodic filings linked to debt servicing and escrow funding schedules.