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Want to see ‘actual cash’ on table from Mallya, says SBI

business Updated: May 04, 2016 15:26 IST
HT Correspondent
HT Correspondent
Hindustan Times

Arundhati Bhattacharya, State Bank of India chief.(HT Archive)


In a retort to Vijay Mallya’s interview on his willingness to settle loan dues with banks, State Bank of India chairman Arundhati Bhattacharya has said she wants to see “actual cash”.

“The willingness seems to be there, we will have to test that out. I want to see actual cash... I don’t want to see ifs and buts,” the SBI chief said in an interview to NDTV Profit on the sidelines of the ADB conference in Frankfurt.

Last week in an interview to The Financial Times, Mallya said he made a very “serious” offer to banks, but it was rejected.

To this, Bhattacharya said: “We did not have a proper understanding of the paying capacity. Unless and until we know the assets of the person how are we to realise the paying capacity? That is what we’ve been asking for time and again, ultimately the highest court in the land did give it to us.”

SBI is the lead lender of the 17-bank consortium, which had lent `9,000 crore to Mallya’s Kingfisher Airlines. Mallya has, however, called the `9,000-crore figure a creation of the media.

Bhattacharya said the principal amount he owes is “around `5,000 crore,” but the final amount keeps changing because “once you take a loan, the interest metre doesn’t stop ticking. The interest gets compounded every quarter.”

Banks, she said, will arrive at a one-time-settlement after assessing the paying power and the value of the loan. “The bank takes a call as to this is the maximum amount one can get. We also try to do what is a net present value to see whether it is a fair deal.”

Recent auctions of Kingfisher headquarters in Mumbai and Kingfisher brands and trademarks have failed to attract any bidders.

Talks with Mallya are ongoing and banks want to settle in any which way possible. “The fact of the matter is we need to settle it, we do realise that. It is part of any cycle, exceptions are not being made only for one person or for big industry or small industry — it is there across the board, we do it for everybody,” she said.

Bhattacharya also pointed out that there is a larger impact of the Mallya case, with a material change seen in the attitude of promoters. “They know, today for instance, we’re very serious about ensuring that money is recovered, we are serious about ensuring that if we give money, the business has to be able to sustain it. If there is a problem, they need to come to us at the first instance, instead of trying to do all sort of things with which they only dig a deeper hole.”