SBI joins lenders in declaring Kingfisher wilful defaulter

Kingfisher Airlines sunk deeper into the mire today as its largest lender, State Bank of India, joined other state-run banks in declaring the airline and its promoter Vijay Mallya as wilful defaulters, along with three other Kingfisher directors.

"We have already sent a notice to KFA (to declare it as wilful defaulter). There is a mandatory time that needs to be given to them to respond and that time is currently on," said SBI chair Arundhati Bhattacharya.

SBI, the lead bank of a consortium of lender banks to Kingfisher, has an exposure of over Rs1,600 crore.

The airline owes Rs7,600 crore to 17 banks. In February 2012, the banks had formally declared a loan recall on KFA and begun the recovery process.

So far, they have recovered around Rs2,000 crore by selling pledged shares. They are now working on selling two other pledged properties - Kingfisher Villa in Goa and Kingfisher House in Mumbai.

United Bank of India last week won legal backing for its decision to declare Mallya and other top executives of the airline as wilful defaulters. Several other banks, both public and private, are also in the process of doing the same.

Asked why SBI has been late in declaring Kingfisher a defaulter, Bhattacharya said, "Whatever is required to be done is being done. The process is already on but we don't want to talk about any particular account in public as we would prefer working silently."