 "Mallya to appear before wilful defaulter panel on July 9")
Vijay Mallya, chairman of Kingfisher Airlines, has been granted more time for appearing before a committee constituted by United Bank of India to examine if the tycoon wilfully defaulted on the lender.
In the last week of May, the Kolkata-based government bank slapped a wilful defaulter notice on Mallya’s grounded Kingfisher Airlines and its board members. If a bank serves such a notice to a borrower, it has to constitute a committee to hear the defence. Mallya was initially scheduled to appear before the panel last Friday. He will now do so on July 9, said sources. UBI’s exposure to Kingfisher is about Rs 350 crore.
According to Reserve Bank of India (RBI) guidelines, banks can categorise defaulters as wilful if the a borrower has not paid back when it has the capacity to honour the obligation or the funds have been diverted and not used for the purpose it was taken, among others.
A consortium of lenders led by State Bank of India has extended loans of around Rs 6,500 crore to the airline, grounded since 2012. The loan is now overdue with all the banks and is classified as a non-performing asset. Banks have started recovering dues from the airline by liquidating the promoter’s personal guarantee, which includes financial and physical assets.
The bankers also hold the pledged shares of United Spirits, Mangalore Chemicals & Fertilizers and Kingfisher, beside the corporate guarantees of United Breweries Holdings.
In the last week of May, the Kolkata-based government bank slapped a wilful defaulter notice on Mallya’s grounded Kingfisher Airlines and its board members. If a bank serves such a notice to a borrower, it has to constitute a committee to hear the defence. Mallya was initially scheduled to appear before the panel last Friday. He will now do so on July 9, said sources. UBI’s exposure to Kingfisher is about Rs 350 crore.
According to Reserve Bank of India (RBI) guidelines, banks can categorise defaulters as wilful if the a borrower has not paid back when it has the capacity to honour the obligation or the funds have been diverted and not used for the purpose it was taken, among others.
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If a borrower is so proven, the information is made available by RBI to all banks. As a result, the borrower will find it difficult to get loans from any.
A consortium of lenders led by State Bank of India has extended loans of around Rs 6,500 crore to the airline, grounded since 2012. The loan is now overdue with all the banks and is classified as a non-performing asset. Banks have started recovering dues from the airline by liquidating the promoter’s personal guarantee, which includes financial and physical assets.
The bankers also hold the pledged shares of United Spirits, Mangalore Chemicals & Fertilizers and Kingfisher, beside the corporate guarantees of United Breweries Holdings.