Kingfisher Airlines should infuse at least Rs 2,000 crore as capital for
reviving the carrier, State Bank of India Chairman Pratip Chaudhuri said today.
Kingfisher Airlines, promoted by Vijay Mallya, owes Rs 7,500 crore to a
consortium of 17 banks led by SBI.
"The company has to bring capital of Rs 2,000 crore minimum, then there can be
some possibility (for revival)...If the company doesn't want to fly, what can
the banks do?" Chaudhuri told reporters on the sidelines of an event here.
Referring to the repeated rounds of inconclusive dialogue between the lenders
and the company, the last round of which took place at the SBI office yesterday,
he said, "talks are on, (but) still there is no progress."
"The solution has to come from the company. If we realise assets, whatever hopes
are there, that will be gone," he added.
Bankers, who are holding on to the collateral which do not meet their individual
exposure, have been eyeing infusion of funds into the airline from the promoter
in the wake of USD 2.1 billion or Rs 11,000 crore deal Mallya stuck by selling
his holding in USL to Britain's Diageo.
However, Mallya has maintained that the USL deal would not necessarily help the
In an earlier meeting on December 17, the airline had reportedly told the
lenders that promoters would bring in Rs 425 crore as part of the revival plan.
Kingfisher Airlines, which has never reported profit, has remained grounded
since October 1 last year, following a staff strike over salaries and suspension
of flying license.
Meanwhile, on the government's plan to infuse Rs 3,000 crore into SBI to boost
its capital base, Chaudhuri said even without the infusion committed by the
government, its core Tier-I capital would be above the 10 per cent mark.
A part of the infusion will go to the associate banks and international
subsidiaries, he said.
Responding to a query, he said he expects the Reserve Bank to cut its key
lending rate repo by 0.50 per cent and the cash reserve ratio by 1 per cent in
its credit policy announcement on January 29.
During their customary pre-policy meet with the RBI brass, the bankers also
requested RBI to deregulate interest rate on current accounts which would help
people put in more money into these accounts, he added.
Speaking about concerns over deposit growth, Chaudhuri said SBI did not share
the concern as it had an excess liquidity of Rs 55,000 crore.
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