NEW DELHI – State-owned Mahanagar Telephone Nigam Limited (MTNL) has informed stock exchanges of a massive default totaling ₹9,036.14 crore in principal and interest payments to seven public sector banks. This latest disclosure, made on Wednesday, January 14, 2026, highlights the worsening liquidity crisis at the debt-ridden telecom operator.

Breakdown of Bank Defaults

The default involves a consortium of major lenders, with Union Bank of India holding the highest exposure. The accounts have been classified as Non-Performing Assets (NPAs) after payment lapses that occurred between late 2024 and early 2025.

Crippling Debt Composition

MTNL’s total financial indebtedness has now climbed to a staggering ₹35,851 crore. The company's balance sheet is under extreme pressure, as its quarterly interest obligations now dwarf its operational revenue by nearly four times.

• Sovereign-Guaranteed Bonds: ₹24,071 crore
• Bank Borrowings (In Default): ₹9,036 crore
• DoT Loans (for Bond Interest): ₹2,744 crore

Restructuring and Asset Monetization

To mitigate the crisis, the government has accelerated an asset monetization plan with a target of collecting ₹4,573 crore from MTNL in FY26. Recent progress includes:

1. BKC Property Sale: In December 2025, MTNL’s board approved the sale of its residential quarters in Mumbai’s Bandra Kurla Complex to NABARD for ₹350.72 crore.
3. Land Monetization: The Department of Public Enterprises is currently identifying additional land parcels for sale or long-term lease.
5. Operational Synergy: MTNL continues its operational arrangement with BSNL, which has shown signs of recovery, recording its first profits in nearly two decades in 2025.

While the government has reaffirmed that there are no immediate plans to shut down the PSU, analysts warn that MTNL is "technically insolvent" with a deeply negative net worth. Its survival remains hinges entirely on the successful execution of G2G (Government-to-Government) asset transfers and potential further sovereign support for its bond obligations.