No more money for Kingfisher: SBI chairman

Nov 23 2012, 02:15 IST
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SummaryPratip Chaudhuri, State Bank of India the chairman, said the bank is urging Kingfisher Airlines to take action on an urgent basis in dealing with its debts.

Pratip Chaudhuri, State Bank of India (SBI) the chairman, said the bank is urging Kingfisher Airlines to take action on an urgent basis in dealing with its debts. Speaking to a leading news channel on Thursday, Chaudhuri said that no further lending to the company looks feasible.

The management of Kingfisher Airlines will make a presentation to its lenders next week spelling out the company's revival plans. “A consortium meeting is scheduled for next week so we are not putting any deadlines,” said Chaudhuri. On the Diageo deal he said that it affects United Spirits (USL), so it is not possible to infer that will automatically bring in money to Kingfisher. “The company has to disclose what their plans are.” he said.

SBI has the largest exposure in the R8,000 crore KFA debt, with loans to the tune of around R1,200 crore. Other lenders include IDBI Bank with an exposure of R727 crore, Punjab National Bank at R710 crore, Bank of India at R575 crore and Bank of Baroda at R530 crore.

Chaudhuri gave the debate over cash reserve ratio (CRR) a fresh lease of life. He said that CRR should be calculated only on the deposits and not the accrued interest on these deposits. Chaudhuri believes that the Reserve Bank of India is thus over-calculating the CRR in terms of the principle amount.

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