The Central Bureau of Investigation (CBI) on Wednesday blamed commercial banks for the delay in declaring Kingfisher Airlines (KFA) and its promoter Vijay Mallya as defaulters.
“The CBI registered a case of cheating and fraud against Kingfisher and its erstwhile management involving allegations of defrauding banks to the tune of Rs 7,000 crore. This case was registered in July 2015, but loans were taken during 2004 to 2012. However, despite our repeated requests, banks did not file a complaint with the CBI. We had to register the case on our own initiative,” CBI director Anil Sinha while addressing a conference jointly organised by the Indian Banks Association and the investigating agency.
HT had reported on February 29, 2016 that the RBI was questioning banks for lending Rs 5,253 cr to Kolkata-based REI Agro Ltd after the CBI uncovered fraud.
Sinha cited the example of how the agency’s suo moto action against Pearls Agro eventually led to the arrest of the company’s chairman.
SBI chairman Arundhati Bhattacharya, who was also present on the occasion, didn’t comment on the issue.
SBI, along with other banks, had lent close to Rs 7,000 crore to the UB Group, the parent company of KFA. It was only last month that PNB declared the airline and Mallya wilful defaulters, a claim currently being contested by Mallya.
“While I fully understand that loan defaults can happen due to business risk and reasons beyond control of banks, borrowers and regulators, yet a significant part of the defaults are wilful and fraudulent,” Sinha said. “What causes greater concern is that a major part of the NPAs and frauds are in large-value accounts,” he said, adding that a large part of such funds moves outside the country to tax havens through unofficial channels.
Gross non-performing assets (NPAs) of banks have gone up from Rs 44,957 crore in 2009 to Rs 3 lakh crore in 2015.
The CBI investigated 171 cases of bank frauds involving Rs 20,646 crore of funds in 2015.