1. SBI reportedly writes off Rs 7,016 crore defaulters’ loans, including Vijay Mallya’s KFA; Kejriwal says that’s what he feared after demonetisation

SBI reportedly writes off Rs 7,016 crore defaulters’ loans, including Vijay Mallya’s KFA; Kejriwal says that’s what he feared after demonetisation

SBI has decided to write off loans worth nearly Rs 7,016 crore of as many as 63 wilful defaulters.

By: | Published: November 16, 2016 12:02 PM
loan defaulter, loan defaulter by SBI, Vijay Mallya, Vijay Mallya loan defaulter, KFA loan default case Mallya’s KFA heads the list of wilful defaulters with SBI, and the airline has outstanding dues of almost Rs 1,201 crore. (Reuters file photo)

State Bank of India (SBI), the country’s largest public sector lender, has decided to write off loans worth nearly Rs 7,016 crore of as many as 63 wilful defaulters, suggests a report in the DNA. What this means is that loans given to beleaguered tycoon Vijay Mallya’s Kingfisher Airlines, will no longer be shown in the bank’s balance sheet. Mallya’s KFA heads the list of wilful defaulters with SBI, and the airline has outstanding dues of almost Rs 1,201 crore, the report states. Some of the other prominent defaulters who feature in the write-off list are; KS Oil (Rs 596 crore), Surya Pharmaceuticals (Rs 526 crore), GET Power (Rs 400 crore) and SAI Info System (Rs 376 crore).

It seems that SBI has a list of top 100 wilful defaulters, out of which it has written off the loans of 63 of them. Out of the remaining 37 defaulters, loans of 31 have been partially written off and those of 6 have been shown as NPAs (Non-performing assets), the report adds. The report goes on to add that SBI has categorised these loans by wilful defaulters as Advance Under Collection Account (AUCA). In effect this means, that as far as the bank is concerned, these loans come under the category of being ‘toxic’.

The report comes days after the Narendra Modi government announced a massive demonetisation drive, in which old Rs 500 and Rs 1000 notes are no longer legal tender money. Commenting on the report, Delhi Chief Minister Arvind Kejriwal said that banks have started doing what he always feared. “Yahi dar tha ki logon ki khoon paseene ki kamayi banko mein jama karake yeh arab patiyon ke loan maanf kar denge. Ye lo, inhone toh shuru bhi kar diya (I feared that the hard-earned money of people will be deposited in banks and now banks will write-off loans of rich people. See, it has already started),” Kejriwal tweeted.

The Narendra Modi government finds itself cornered on the issue of demonetisation of old Rs 500 and Rs 1000 notes. The Parliament’s winter session has seen a story start with most Opposition parties vociferously opposing the demonetisation move, criticising its poor implementation. The long queues outside banks and ATMs, and the current cash supply crunch are also adding to the ammunition with the Opposition. Nearly 30 protests are reported to have been planned by the Opposition.

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