The Reserve Bank is not opposed to the State Bank of India extending support to the cash-strapped Kingfisher Airlines, its Deputy Governor K.C. Chakrabarty said on Wednesday.
“Absolutely not,” he told reporters when asked to comment on reports suggesting that SBI has agreed to pump more money into the airline.
RBI does not oppose “professional decision” of the bank, Mr. Chakrbarty said.
He further said if the bank felt that by giving a little more money, it could get back the entire money, “that’s what they will do”.
“Banks are commercial entities. If they feel by supporting a unit, if the unit can survive, they must explore that possibility,” Mr. Chakrabarty said. “Banks are risk-taking entities”.
Kingfisher, which has an outstanding debt of over Rs 7,057.08 crore (according to the latest figures), has requested a consortium of lenders, led by SBI, for a working capital support of Rs 200-300 crore.
The airlines, whose bank accounts have been frozen for non-payment of taxes, has cancelled a number of flights in the past few days following which the aviation regulator DGCA had on Tuesday set a 24-hour deadline for it to come up with a “realistic” flight schedule.
Keywords: Kingfisher Airlines crisis
The MM Singh Government SUBSIDIZES the RICH,in GIGANTIC proportions,
and taxes the poor.India is in very great danger from M M Singh who is
following the diktats,of the World Bank, in other areas,like the
Budget,12th Five year Plan etc etc.....
Earlier reports mention that shares of KFA priced at Rs 39/= were
bought,by the banks, at a PREMIUM o Rs 61/=,that at Rs 100/=!
Bank Depositors and Share-holders lose.
It is high time that the government should think imposing convertibility option as
mandatory,when its good money is pumped in to get back the bad money (the banks'
one of the very few options for such toxic assets), particularly in this very important
sector.That will also ensure management commitment duly tied up to the company's
future which is vital to the national interest on financial prudence; let us not become
another Greece for Asia.
Am not sure on what basis they(SBI) lend our money? what are the legal surities they have to get back the money they have lended to KFA so far?.
When a common man wants to go for a loan, banks asks for security (land, property, etc.,), in such case, how come SBI has given such a huge amount to KFA?.
If there are no such surities, then sure, being a big business magnet, he knows how to twist the arms of banks and blackmail them. Why DGCA, Government and PM is keeping quite?. Why can't they seize the assets of V.Mallya?.
If this is the case, one fine day all banks in India will file for bankrupcy and common man's money will be swindled out by these capatilists.
Why the same principle is not applied when it comes to lending to common man? even for an education loan. If one goes deep in to the NPA(Non Performing Assets) accounts of our commercial banks, there could be many big sharks escaped scot free, under the noble head NPA. Because all the assets will be in the name of the spouse/dear ones so that the money recipient can ‘t perform. Then it calls for a meeting with the Manager of the concerned branch to assess the prevailing repaying capacity of the defaulter and comes to an agreement, yes an agreement to pay according to the then existing capacity or to declare NPA. Whereas the poor will run from pillar to post to see that the borrowed money is paid back when he sees the stereo type letter stating that the bank find no reason why his property can't be attached or auctioned. Will any commercial bank show the courage to publish the name address and amount declared as NPA along with their yearly financial statement? At least when the borrower becomes the defaulter the bank should find no reason why the so called confidentiality of customer relation can’t be divulged. So that the common man can see the well to do paupers on the road languishing in foreign cars and assess to what extend they are poor. Will it open an NPA/Manager-Defaulter nexus scam in the already troubled financial market?
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