Altico crisis: Puri defends en-cashing FD

HDFC Bank chief Aditya Puri on Monday said his bank did not act out-of-turn in revoking the security to safeguard its exposure to Altico Capital, leading to a liquidity crisis at the midsized shadow bank and the resultant defaults, earlier this month.

He was responding to a specific comment by SBI chairman Rajnish Kumar, who, without naming any bank, had termed such tendencies among bankers as "selfish".

Altico, which owes over Rs 4,500 crore to the system, had defaulted on an interest payment of around Rs 20 crore earlier this month to an ECB raised through the UAE lender Masherq Bank.

Kumar had said he had expected all bankers to act in cohesion while resolving such a case and not act out of turn.

"What is out-of- turn? It is my security and I will exercise it," Puri quipped.

"Let's be very clear. In my view, specific security is specific to the bank. That is the basis of the loan, that is commercial practice and that is the global practice," Puri told reporters here.

Refusing to speak on the SBI chief's specific comments, Puri said, "Rajnish Kumar is a seasoned banker, a good friend and we are a democracy." He also said he has spoken to Kumar since his comments.

On September 14, SBI had slammed a "selfish" lender to Altico and blaming it for causing troubles to the wider financial system.

According to reports, a HDFC Bank had encashed the fixed deposit quickly after news about the crisis at Altico came to light to secure its exposure by "netting-off" money.