CA NeWs Beta*: Shocking! Banks can recover just Rs 6 crore out of Rs 7000 crore loan lent to Kingfisher

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Tuesday, February 16, 2016

Shocking! Banks can recover just Rs 6 crore out of Rs 7000 crore loan lent to Kingfisher

New Delhi: What a mockery the series of corporate loans defaults have made the country's banking system!
It is shocking to learn that members of the 17-bank consortium of lenders led by the State Bank of India, who lent Rs 6,900 crore to Vijaya Mallya's Kingfisher airline, may never succeed in recovering
the money from the defunct carrier.
According to a DNA report, the State Bank of India (SBI), the major lender to Mallya's airline, till now has managed to recover only Rs 155 crore out of the Rs 1,623 crore due from it. The reason behind the lenders' plight is the fact that the value of Kingfisher Airlines pledged to the banks has now plummeted from Rs 4,000 crore to Rs 6 crore!
SBI is unable to find any buyer for the  'Kingfisher' trademarks like Fly Kingfisher (label mark & word), Flying Models, Fly The Good Times, Funliner & Kingfisher (label mark). A bank consortium led by SBI has decided to auction Kingfisher House in Mumbai on March 17 this year in a bid to recover a part of Rs 6,963 crore debt due from the now grounded Kingfisher Airlines.
While ​SBI had an exposure of Rs 1,600 crore to the airline, Punjab National Bank had an exposure of Rs 800 crore to the defunct carrier.
The lenders had claimed that United Breweries (Holdings) Ltd and Vijay Mallya were guarantors to the loans.
Other banks that have exposure to the airline include Punjab National Bank and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore), Central Bank of India (Rs 410 crore).
UCO Bank has to recover Rs 320 crore, Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).

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