It is really astonishing to know that now SBI and 17 other banks have served Recall notice to Kingfisher to recover the loan which should have been served long before the account was categorized as NPA. It proves that babnks have not treated the loans given to KFA as substandard and still the loans in the name of KFA stand as standard in the books of consortium banks.
It means banks were firing paper bullet threatening against KFA to show the Government that they are active . In fact these banks were concealing their misdeeds as long as possible. They enjoyed a lot by lending to KFA and they are perhaps afraid of exposure of the same by KFA promoters.They may be under pressure of some powerful ministers in government to stop legal action or to delay action .
Whatever may be the reason behind delay in taking legal recourse , banks have given enough time to defaulter KFA to save KFA, to save employees , to save bank's provision .Not only this these banks have also caused much loss to the bank by such inordinate delay which has caused sharp fall in share value and value of prime as well as collateral assets of KFA pledged with banks as security.
This is new abnormal phenomenon so far as bankers are concerned. They usually sleep for years till the borrower become bankrupt , assets are sold off or taken to other place , promoters of company are saved, sanctioning officers of such bad loans get safe retirement and then they initiate legal action against defaulting borrowers to recover the money.
After all it is not their personal money. It s government's money . These corrupt bankers support bad borrowers as long as possible because it helps in keeping themselves safe till retirement.
These clever banks however take action against a few small borrowers quickly to show the bosses that they are active and effective. They know the art of keeping their bosses in good stream.This is the reason that bad assets in books of all banks have now become voluminous as mountain.
It is well known to that all high value loans are sancitoned only by a team of top officials , still none of top ranked officers are punished for bad lending and bad monitoring .Rather these clever bankers get blessings of ministers and RBI bosses and hence they get out of turn promotion and it is they who become CMD and ED of a bank in shortest period of service.
Banks serve ‘loan recall notice’ on Kingfisher Airlines--- Business Line News
Difficult to estimate how long the recovery process will take, says SBI official
MUMBAI, APRIL 3:
State Bank of India on Wednesday said that a loan recall notice has been served on the defunct Kingfisher Airlines (KFA) on behalf of the consortium of 17 lenders.
“We have served the loan recall notice. The notices under the Sarfaesi Act, DRT and other processes will follow.
“Also, the recall notice was served just yesterday, so it will be very difficult to estimate the time that the recovery process will take,” Shyamal Acharya, Deputy Managing Director, Mid-Corporate group, State Bank of India, told newspersons on the sidelines of an event hosted by Gems and Jewellery Export Promotion Council.
Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act and DRT (Debt Recovery Tribunal) are two routes that lenders can resort to for recovering bad loans.
KFA, the airline promoted by Vijay Mallya, owes about Rs 7,000 crore to lenders. SBI as the consortium leader has the maximum exposure to Kingfisher at Rs 1,800 crore.
PLEDGED SHARES
Banks have already sold around 7.3 lakh of the 26 lakh United Spirits shares pledged with them by Mallya, who is also the promoter of United Spirits, a subsidiary of United Breweries Holdings.
Acharya refused to disclose the amount of money that banks have realised so far from the sale of shares. However, a senior official informed that the average realisation is about Rs 1,900 a share. Banks have already sold all the shares of Mangalore Chemicals and Fertilisers pledged by Mallya, realising around Rs 100 crore.
Reacting to Tuesday's Bombay High Court order of no interim relief to KFA-promoter, Acharya said the lenders will continue to sell the shares in tranches.
DIAGEO DEAL
Concerns that the USL share sale by banks might hurt Mallya’s plans to sell his stake in the liquor company to Diageo (for about Rs 11,000 crore), Acharya said, “We are not a party to the deal and we cannot wait. There is no stay (from the court on selling of shares) and so there is no reason we will not do that.”
Also, it also would not be feasible to participate in the open offer as the price is set at Rs 1,440 a share by Diageo to acquire USL. The current market price of USL is much higher than the open offer price. The USL shares on Wednesday closed down two per cent at Rs 1,822.60 on the Bombay Stock Exchange.
The open offer commences on April 10.
According to Acharya, the core group has given a floor price to be protected in the share sale, but refused to share the same.
“SBICAPS Trustee is the trustee of the shares… they have been given a floor-price (by the core group). They are selling in lots and we have got good prices so far," he said.
However, a senior official at SBICAP Trustee denied that any floor price has been set.
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