Mallya case: banks to learn their lesson

The amount that Mallya failed to repay to banks is more than the total default on education loan in the country at a little over Rs 5,000 crore

jasleen

Jasleen Kaur | March 14, 2016 | New Delhi


#Kingfisher Airlines   #Rajya Sabha   #Vijay Mallya   #Banks   #Banking   #Column  


The recent statement from the liquor baron Vijay Mallya indicating he may not return to India at all has another bad news for banks which are putting efforts to recover Rs 7,000 crore from him. 

Putting the entire onus on banks, Mallya has said banks give out loans knowing the risk involved and he should not be made a villain. Of course he should not be. After all his intentions were best, as he claims and it is a bank which decides who gets the loan. It is not the first instance where banks are running after a business giant for recovery of loans. But it seems they have not learnt the lesson yet.
 
Not an easy road ahead for Indian banks

The poor accountability mechanisms have reduced the banking sector, specifically the state-run banks, to weak financial institutions burdened with huge debt of non-performing assets.

Easy loan to big companies, without monitoring the end use of funds, has been some of the reasons for the poor state of banks. Though, the picture changes completely when it comes to giving or recovery of loans from poor farmers. Even today, poor farmers are forced to commit suicide if they fail to pay off small loans.

No one can be blamed alone in the entire episode of Rs 7,000 crores scam. While a clear case of default and fund diversion and financial irregularities happened way back in December 2011 by Mallya. It was only in November 2015, when the State Bank of India (SBI), leading lender in the consortium, tagged him as wilful defaulter.

Only in March this year, SBI, which heads the consortium of 17 lenders to the Kingfisher Airlines, sought arrest of Vijay Mallya, when the bank approached Debt Recovery Tribunal. It sought action against him defaulting on loans over Rs 7,000 crore.

It was considered to be a strong action, but it was little too late. Banks filed petition in the supreme court to ensure Mallya does not flee from the country. But the liquid baron, who was already tipped off about the banks moving court, had already left the country.

It created a huge political uproar with political parties blaming each other for creating an easy path for Mallya to escape. But the entire story reflects how easy it is to manipulate things and make mockery of India law and judiciary for at least some people in the country.

Mallya is accused of defaulting Rs 7,000 crore. According to an estimate this is more than the total default on education loan in the country at a little over Rs 5,000 crore. It would be difficult for anyone to accept that the government and investigating agencies were unaware that the system was manipulated.

So far Mallya has not showed any willingness to repay. He has managed to use the judicial system to delay the loan repayment to banks.
While there is a clear chance that banks recovers only a fraction of their several thousand crores of dues as have been the story in the past.

Picture will be clearer in the coming months when we will see how severely Rajya Sabha member Vijay Mallya is dealt with. But the only hope one can have is that the banks learn a lesson this time and do not repeat the same mistake again.

Comments

 

Other News

BJP-RSS have never had elected presidents to date: Pawan Khera

In a scathing attack on the government, PawanKhera, national spokesperson of the Congress party, has said that the BJP is remote-controlled by RSS, an unregistered organisation that decides who the PM will be and lead the country, yet no question is asked to them. Asking how Amit Shah, JP N

Maharashtra floods: On-ground R&R hampered by VIP visits, say Pawar

Nationalist Congress Party president and senior leader Sharad Pawar has appealed to political leaders in the state not to visit the flood ravaged areas of Maharashtra as it diverts attention of those engaged in relief and rehabilitation to VIP arrangements and hampers work. The deat

Sri Lankan media baron Rajandram Rajamahendran passes away

Sri Lankan media baron, business tycoon and Chairman of The Capital Maharaja Group conglomerate, Rajandram Rajamahendran, passed away at Colombo early Sunday morning. He was 79. Rajamahendran was suffering from health problems and was receiving treatment at a private hospital in Colombo. &nb

Ganga heavily polluted with microplastics, finds study

A new study titled, ‘Quantitative analysis of Microplastics along River Ganga’ by Toxics Link has found heavy concentration of microplastics in the Ganga. All samples collected for study from the river at Haridwar, Kanpur and Varanasi were found to be polluted with microplastics.

Maharashtra flood situation grim, rescue works on

At least 79 people were killed and 56 were missing as the flood situation in Maharashtra remained grim on Saturday. Torrential rainfall in various parts of the state, coinciding with high tides and also discharge from dams, led to inundation of many regions and floods caused landslides in some places too.

Maharashtra partners with Climate Group to promote electric vehicles

Within days of announcing its new Electric Vehicle Policy 2021, Maharashtra Friday announced its partnership with Climate Group’s EV100 network to push and promote electric vehicles and reduce CO2 emissions. The policy, meanwhile, was also notified on Friday. Climate Gro

Visionary Talk with Pawan Khera, On Present State of Governance & Congress Party



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter