SC verdict in Mallya case will enhance recovery prospects: Bankers

The Supreme Court verdict in a contempt petition involving industrialist Vijay Mallya will enhance the prospects of recoveries, which are already in progress in the Kingfisher Airlines account, bankers said.
 
Beyond the case, the decision also has demonstrative effect for sternly dealing with other big-ticket defaults, two senior officials with large banks said in a first-cut assessment.
 
The Supreme Court on Monday sentenced fugitive businessman Vijay Mallya to four months in jail and fined him Rs 2,000 for a 2017 contempt of court case over transferring $40 million to his children in violation of court orders.

 
The recoveries in this case were already in progress, the bankers said. While the recoveries pertaining to dues related to the principal amount ( over Rs 5,000 crore) are through, those involving the interest component are under way, the bankers added.
 
“The Supreme Court verdict strengthens our hands,” said a banker who did not wish to be named. “However, for a clear view on the matter, we will have to go through the judgment and consult legal experts for future course of action,” the banker added.
 
For the State Bank of India, Mallya’s defunct Kingfisher Airlines became a non-performing asset in December 2011. A consortium of lenders led by SBI has been pursuing legal forums for debt repayment, the executives said.

 
The bankers added that since this verdict came from the apex court, banks may be able to deal sternly with other defaulting borrowers, especially corporate entities. However, the challenge of getting Mallya back to India remains and it is not clear how the authorities will deal with it.
 
Mallya is on bail in London, where he has been fighting extradition to India following his arrest in 2017. He was found guilty by the Supreme Court in 2017 for violating court by transferring $40 million to his children and failing to fully disclose his assets.