Recovering Mallya loans a long way off for banks

The 61-year-old’s arrest in London and his immediate release on bail failed to cheer bankers.

Vijay Mallya (PTI file photo)

MUMBAI: Hours after his arrest on Tuesday, Vijay Mallya in his trademark style mocked the media tweeting “usual Indian media hype.’ Turns out, the absconding liquor baron isn’t alone in his ‘realistic’ thinking. Even bankers, who want to recover Rs 9,100-crore worth dues, are certain that it’ll be a while before they can see real money flowing into their coffers from Mallya’s firms.

The 61-year-old’s arrest in London and his immediate release on bail failed to cheer bankers, who think, the Indian authorities attempt to extradite Mallya and the subsequent trial could get stuck in procedural delays. Mallya-owned Kingfisher Airlines owes an interest-piling Rs 9,100 crore to a consortium of 17 banks.

“It’s (Mallya’s arrest) good news though it comes an year after he left the country. But there are protocols to be adhered to and it’ll be a while before actual loan recoveries start happening,” a senior official, part of the 17-member bank consortium told Express.

The downbeat expectations of lenders possibly stems from their disappointing experience disposing the flamboyant billionaire’s assets including prime properties like Kingfisher Villa in Goa at lower sticker prices than the going rate, while others like the Kingfisher House in Mumbai are yet to find a suitor.

“A slew of cases were filed by multiple agencies and the ED even attached some properties. Procedural delays could slowdown loan recovery, even if the extradition process picks up,” he added.

At least half-a-dozen cases booked against Mallya and his now-defunct airline for loan default and non-payment of taxes are waiting to start/re-start proceedings. It may be noted that the SBI-led consortium had filed a complaint last year, prompting the CBI to initiate a probe against Mallya.

The CBI had registered another case in 2015 against Kingfisher Airlines and Mallya for an alleged Rs 900 crore loan fraud at IDBI Bank and even made a few arrests. There’s a service tax default of Rs 100 crore pursued by the Income Tax authorities, then there’s the case with ED that declared Mallya as a proclaimed offender besides ongoing proceedings at the Debt Recovery Tribunal in Bengaluru.