Was IDBI ex-CMD behind Rs 900-cr loan to Vijay Mallya’s airlines?

Yogesh Agarwal, former CMD of IDBI Bank, may have played a key role in sanctioning loans worth Rs 900 crore to Vijay Mallya’s Kingfisher Airlines (KFA) despite the carrier’s low credit ratings, a CBI probe has revealed, sources said.

Yogesh Agarwal, former CMD of IDBI Bank, may have played a key role in sanctioning loans worth Rs 900 crore to Vijay Mallya’s Kingfisher Airlines (KFA) despite the carrier’s low credit ratings, a CBI probe has revealed, sources said.

Kingfisher airlines had applied for a “corporate loan” of Rs 950 crore on October 1 of 2009, out of which around Rs 900 crore was sanctioned in three installments by November 19 last year by IDBI’s credit committee.(File Photo)

KFA had applied for a “corporate loan” of Rs 950 crore on October 1 of 2009, out of which around Rs 900 crore was sanctioned in three installments by November 19 last year by the bank’s credit committee, the source added.

The CBI is looking into the minutes of an alleged meeting held between Mallya and Agarwal on October 6 last year to see if it led to the issue of the sanction subsequently, he added. “The then CFO of KFA, A Raghunathan, who was named in CBI’s First Information Report of July last year, had twice written to the IDBI top brass, requesting to expedite the loan’s sanction process, and referred on both the occasions that a “meeting” was held between Mallya and Agarwal in this regard.”

When contacted by HT, Aggarwal said: “I don’t want to comment on this issue.”

Read: Kingfisher loan default case: ED summons IDBI Bank, KFA officials

Raghunathan had written to the bank to expedite the sanction of the loan despite the fact that KFA allegedly did not meet the conditions stipulated under the bank’s corporate loan policy on account of “negative financials” and inadequate credit ratings, the source added.

The loan application was signed by Raghunathan.

“Twice the CFO wrote to the bank, citing a meeting between Vijay Mallya and the then IDBI CMD, and things began moving fast,” the source said. “The loan was okayed by the bank’s credit committee with Agarwal’s approval.”

The UB Group has denied any wrongdoing so far.

Read: IDBI bank gave Vijay Mallya Rs 900 cr despite KFA’s low credit ratings