State Bank of India, the largest public sector bank, has allgedly sent a letter to
“Last week,
Very recently United Bank of India (UBI) declared the defunct airline and Mallya as wilful defaulter. Reports suggest that the bank took this extreme step after official from the company did not turn up for a meeting with the bank’s grieviance redressal unit. UBI is the first state-owned bank to have declared KFA as wilful defaulter.
On contacting the airline for a response, the company spokesperson Prakash Mirpuri said, “It is not possible for a bank to simply declare anybody as a wilful defaulter without following due process. The RBI circular is clear in this regard. We have robust and comprehensive answers backed by documentation to challenge any such move”.
He further added, “The Hon'ble Supreme Court observed that the SLP filed by KFA against UBI seeking legal representation before the Grievance Redressal Committee of the Bank had become infructuous as the Committee had already made a decision. The Hon'ble Court said that it was up to KFA to pursue such legal remedies as are available,”Mirpuri told BI India in an email response.
Mirpuri also noted that the airline will vigorously challenge the decision of UBI. “KFA and its directors strongly deny the allegations of wilful default for alleged non-payment of Rs 7.5 crores to UBI. Kingfisher Airline and its directors have not been given any opportunity to present their case through lawyers of their choice before UBI who have come to a wrongful ex-parte decision in great haste when the question of legal representation was under challenge.” The company however did not comment on SBI’s letter.
The state–run public sector bank, SBI, did not comment on the issue at the time when the story went to press.