Kingfisher should infuse Rs 2,000 cr for revival: SBI
Kingfisher Airlines, promoted by Vijay Mallya, owes Rs 7,500 crore to a consortium of 17 banks led by SBI.
Mumbai: Kingfisher Airlines should infuse at least Rs 2,000 crore as capital for reviving the carrier, State Bank of India Chairman Pratip Chaudhuri said on Saturday. Kingfisher Airlines, promoted by Vijay Mallya, owes Rs 7,500 crore to a consortium of 17 banks led by SBI.
"The company has to bring capital of Rs 2,000 crore minimum, then there can be some possibility (for revival)...if the company doesn't want to fly, what can the banks do?" Chaudhuri told reporters on the sidelines of an event here.
Referring to the repeated rounds of inconclusive dialogue between the lenders and the company, the last round of which took place at the SBI office on Friday, he said, "talks are on, (but) still there is no progress."
"The solution has to come from the company. If we realise assets, whatever hopes are there, that will be gone," he added. Bankers, who are holding on to the collateral which do not meet their individual exposure, have been eyeing infusion of funds into the airline from the promoter in the wake of $2.1 billion or Rs 11,000 crore deal Mallya stuck by selling his holding in USL to Britain's Diageo.
However, Mallya has maintained that the USL deal would not necessarily help the airline. In an earlier meeting on December 17, the airline had reportedly told the lenders that promoters would bring in Rs 425 crore as part of the revival plan.
Kingfisher Airlines, which has never reported profit, has remained grounded since October 1 last year, following a staff strike over salaries and suspension of flying license. Meanwhile, on the government's plan to infuse Rs 3,000 crore into SBI to boost its capital base, Chaudhuri said even without the infusion committed by the government, its core Tier-I capital would be above the 10 per cent mark.
A part of the infusion will go to the associate banks and international subsidiaries, he said. Responding to a query, he said he expects the Reserve Bank to cut its key lending rate repo by 0.50 per cent and the cash reserve ratio by 1 per cent in its credit policy announcement on January 29.
During their customary pre-policy meet with the RBI brass, the bankers also requested RBI to deregulate interest rate on current accounts which would help people put in more money into these accounts, he added.
Speaking about concerns over deposit growth, Chaudhuri said SBI did not share the concern as it had an excess liquidity of Rs 55,000 crore.