‘Mallya extradition will not end debt problem of banks’
NEW DELHI: Even as the extradition process of willful defaulter Vijay Mallya — the promoter of now grounded Kingfisher Airlines — has begun, banks, reeling under the pressure of bad assets, have little to cheer about.
Bankers on condition of anonymity told Hindustan Times that the extradition process “does not mean any recovery of debt from Mallya.”
However, government sources said the Indian agencies will soon focus on investigating into Mallya’s other “benami” assets that have so far remained concealed.
“The (extradition) process will not result in any recovery. If he had to pay back, he would have done it by now. His assets are being auctioned but the process has proved to be ineffective. The process of extradition is more of a moral solace than anything else,” a senior public sector bank official said.
Sources said that talks between the UK and Indian delivery governments are on and this case will be taken up separately. His extradition could take lesser time and the process is likely to be completed by year end.
“This process will take about three to six months as it is a clear case otherwise and once he is brought back to India, the Indian authorities can start their investigation,” Manoj Kumar, legal expert and managing partner Hammurabi and Solomon said.
Kingfisher Airlines owes about ₹9,000 crore to a 17-member consortium of banks led by the State Bank of India.
Mallya, who was arrested the United Kingdom and later released on bail, has been ignoring multiple summons from the courts in India.
Bank sources also said that there is “some discontent” over the consortium’s refusal to accept Mallya’s offer for a ₹4,000 crore settlement last year.
Auction of Mallya’s properties — Kingfisher House in Mumbai and Kingfisher Villa in Goa failed to evoke any interest and the exercise proved to be a damp squib.
“The bigger banks took the final decision and most other banks followed the decision but now banks are likely to get very little...without giving any thought, a decision was taken to reject the offer,” said a source who did not wish to be identified.
KINGFISHER AIRLINES OWES ABOUT ₹9,000 CR TO A 17MEMBER CONSORTIUM OF BANKS LED BY THE STATE BANK OF INDIA