Banks decide to start recovery of Kingfisher Airlines loans
He admitted that banks will have to take a "hair cut" in realisation of securities. "Normally, whenever a loan is called off, there is definitely a haircut (the difference between the present market value of collateral and value assessed by the lender). But how much is the haircut, is difficult to quantify," he added.
Kingfisher has been grounded since October 1 last after a labour unrest due to non-payment of salaries which have not been paid since last May.
"The KFA management has been telling us that they need more time because they are working on the Diageo-USL deal which is a very complex one. But bankers feel that we have given enough time and it will be difficult for us to give any further time," Acharya said.
The exposure of banks to the troubled carrier runs into Rs 6,360 crore. Unpaid interest and compounded interest take it to over Rs 7,500 crore.
SBI, the leader of the consortium of lenders, has the maximum exposure with Rs 1,600 crore, followed by Punjab National Bank with Rs 800 crore, IDBI Bank Rs 800 crore, Bank of India Rs 650 crore and Bank of Baroda Rs 550 crore.
"The consortium feels that we should consider recalling advances to the company. Each bank has to go back to the committees or internal authorities and take the necessary approvals," Acharya said.
This is the consortium decision and each bank has to go back to the