Lost hopes! SBI expects to recover only part of Kingfisher loans

As per an internal report of India’s biggest lender, the State Bank of India (SBI), there is little hope left of recovering anything substantial from the Kingfisher Airlines.

The report says that SBI should expect a hit of about Rs 900 crore because of the bad debts in the grounded airlines.

SBI leads a consortium of 14 banks that the Vijay Mallya-promoted airline owes money to and the loans are worth more than Rs 5,000 crore, excluding accrued interest, out of which SBI has a fund-based exposure of over Rs 1,200 crore.

"It is the policy of the bank not to comment upon individual accounts and its treatment" an SBI spokesperson told ET.

As of now, Mallya is in the UK and the Indian government has been fighting tooth and nail to extradite him, so that he can be put under trial for cases related to the airline's loan defaults.

Mallya, however, has denied any wrongdoing.

Banks now expect to recover about Rs 1,100 crore through the sale of pledged assets that are valued at Rs 1,565 crore, including Mallya's Kingfisher villa in Goa.

The villa was sold for Rs 73 crore in April as against the pegged market value of Rs 85 crore.

"There are no takers for the Kingfisher Airlines brands which are valued (at) Rs 7-315 crore." a senior bank executive said. "Forget about brands, we have so far have struggled to sell even the real estate assets, such as Kingfisher House, Mumbai."