Technoglitch
Core Member
The banks' battle with Kingfisher Airlines continues with the leading lender in the consortium State Bank of India (SBI) finally tagging Vijay Mallya and two of his companies as wilful defaulters.
According to the PTI report, besides Mallya, the grounded Kingfisher Airlines and its holding company United Breweries Holdings, too have been tagged as wilful defaulters by SBI after Mallya’s lawyers failed to make a strong case in the Supreme Court on their client’s genuine state of stress in repaying bank money. Mallya owes more than Rs 7,000 crore to some 17 banks, most of them state-run lenders.
The Kingfisher case shows that Mallya has cleverly managed to use the judicial system to delay the loan repayment to banks. Creation of a separate court to address large-ticket chronic debt NPAs can solve this problem to a great extent.
This court should be constituted with a clear mandate of fast track resolution of NPA disputes and should have pan-India jurisdiction to handle all such cases. The current system of multiple courts has proved inefficient to handle big-ticket bank NPA cases.
Even the success of proposed bankruptcy code would depend up on faster resolution of legal disputes. It’s not wise to let cronies misuse the judicial system to their advantage and take the banking system for a ride. Till the time an effective judicial platform is set up to handle such cases, even the wilful defaulter tag — once described by RBI governor Raghuram Rajan as a powerful weapon — is nothing more than a child's toy.
SBI finally tags Vijay Mallya ‘wilful defaulter’, others still dragging feet. We need special courts to fix crony promoters - Firstpost
According to the PTI report, besides Mallya, the grounded Kingfisher Airlines and its holding company United Breweries Holdings, too have been tagged as wilful defaulters by SBI after Mallya’s lawyers failed to make a strong case in the Supreme Court on their client’s genuine state of stress in repaying bank money. Mallya owes more than Rs 7,000 crore to some 17 banks, most of them state-run lenders.
The Kingfisher case shows that Mallya has cleverly managed to use the judicial system to delay the loan repayment to banks. Creation of a separate court to address large-ticket chronic debt NPAs can solve this problem to a great extent.
This court should be constituted with a clear mandate of fast track resolution of NPA disputes and should have pan-India jurisdiction to handle all such cases. The current system of multiple courts has proved inefficient to handle big-ticket bank NPA cases.
Even the success of proposed bankruptcy code would depend up on faster resolution of legal disputes. It’s not wise to let cronies misuse the judicial system to their advantage and take the banking system for a ride. Till the time an effective judicial platform is set up to handle such cases, even the wilful defaulter tag — once described by RBI governor Raghuram Rajan as a powerful weapon — is nothing more than a child's toy.
SBI finally tags Vijay Mallya ‘wilful defaulter’, others still dragging feet. We need special courts to fix crony promoters - Firstpost
