BANGALORE: The country’s largest lender, State Bank of India (SBI), has only recovered around Rs 350 to Rs 400 crore of its overall Rs 1,500 crore lending to the grounded Kingfisher Airlines, said the bank’s chairperson.
Arundhati Bhattacharya, CMD of SBI, who was in Bangalore on Saturday, said that recovering the full loan given to Vijay Mallya’s airline business would take more time. “We have taken necessary steps for recovery, but that will take time because there is the legal system to negotiate,” she said.
A 17-bank consortium, led by SBI, has been selling pledged shares in Mallya’s UB Group of companies in the open market and has been trying to also sell other mortgaged assets of KFA and the UB group.
However, Mallya has been stalling these attempts of sale by taking legal action.
On the larger issue of containing NPA (non-performing assets) accounts, Bhattacharya said that the bank had channelled a lot of manpower to follow up and ensure that NPAs are recovered. The economic slowdown of the past nearly two years has pushed a number of large corporate debtors to default.
SBI has set up committees to look into different NPA assets. These committees are also asked to come up with differentiated solutions to ensure that stressed companies don’t slip into the NPA fold.
“The kind of things thought of are getting borrowers to sell off some of their non-core assets, asking them to prioritize their projects so that the ones very close to completion are finished first. Basically, we help in monitoring their work, managing their work and coming up with recovery solutions,” added Bhattacharya.
She also said that the equity markets needed to ‘stop being difficult’ for companies to raise money.
“At this point, equities are rallying quite a bit, but if you see the rallies, they are happening only for established stocks. We need to see the same market being able to support new IPOs,” she said. In the absence of that, companies would remain too dependent on bank funds.
