State-owned telecom operator Mahanagar Telephone Nigam Ltd (MTNL) is likely to see its debt resolution materialize within the next three to four months. Ashok Chandra, Managing Director and CEO of Punjab National Bank (PNB), shared this update during a recent interview.
While specific details remain under wraps, Chandra confirmed that discussions among stakeholders are ongoing to finalize the resolution plan. He emphasized that the process requires time as all parties work toward a cohesive solution for MTNL’s financial troubles.
MTNL, established in 1986, provides fixed-line telecom services in Delhi and Mumbai. The company currently owes PNB ₹474.66 crore, part of its total dues exceeding ₹7,780 crore as of June 2024.
The telecom operator’s loan accounts were classified as non-performing assets (NPAs) by multiple banks, including Union Bank of India, Bank of India, State Bank of India, and others between August 2024 and February 2025. Lenders collectively have an exposure of ₹8,585 crore to MTNL as of June 2025.
MTNL’s financial struggles stem from declining landline subscribers and its failure to keep pace with private telecom players in infrastructure development. Previous attempts to recover dues by selling MTNL’s properties hit regulatory hurdles, delaying the resolution process.
Despite these challenges, Chandra remains optimistic about PNB’s recovery efforts. The bank aims to recover over ₹16,000 crore in FY26, with net recoveries already standing at ₹3,249 crore in the April-June quarter.
Loan slippages during the same quarter reached ₹1,792 crore, with MSME loans seeing the highest year-on-year increase. However, Chandra highlighted MSMEs as a crucial growth area for PNB, citing an 18.6% annual increase in MSME loans, totaling ₹1.7 trillion by June 2025.
PNB is leveraging digital tools and outreach programs to strengthen its MSME portfolio. Chandra expressed confidence in the sector’s potential to contribute significantly to the bank’s growth.
On the retail front, PNB anticipates steady growth in housing, vehicle, and education loans, with minimal stress expected in unsecured lending. The bank’s corporate loan portfolio also shows promise, with sanctioned loans worth ₹1.3 trillion awaiting disbursement in phases.
Renewable energy, defense, and infrastructure projects are driving corporate credit demand, with PNB actively engaging in project finance for these sectors. The bank’s corporate loan book grew 6.9% year-on-year, reaching ₹4.7 trillion by June 2025.
PNB reported a net profit of ₹1,675 crore for Q1 FY26, down 49% from the previous year due to higher tax provisions. Analysts noted an improvement in asset quality, though they revised earnings estimates downward by 12% for FY26.
Shares of PNB closed 2.5% lower at ₹105.4 on BSE following the earnings announcement. Despite market fluctuations, Chandra remains confident in the bank’s growth trajectory, backed by a strong corporate loan pipeline.