Ambiguity in Jet Airways’ loan status

Varun Aggarwal Mumbai | Updated on August 13, 2018 Published on August 13, 2018

Jet Airways’ loan account with multiple banks may have been moved to default status for a brief period. According to a report from the Central Repository of Information on Large Credits, a unit of the RBI, Jet Airways loans with four Indian banks, namely State Bank of India, YES Bank, Indian Overseas Bank and Punjab National Bank, were moved to default status on different occasions in the last one year.

While Jet Airways loans were ‘standard’ with the banks as per a report on August 13 from CRILC, loans worth ₹110 crore entered the SMA-2 category of default, as repayments were delayed by over 61 days.

But Jet Airways, in a statement, said all of its accounts with lenders are ‘standard’ and there is no overdue in any of the accounts and called the issue a ‘technical error’.

“A tabular statement prepared by CRILC (Central Repository of Information on Large Credits), currently in circulation in some sections of media, placing Jet under default status by some of the banks on certain dates is only due to technical error which has subsequently been rectified in the system. The company further clarifies that over the last several years, there has been no instances of default in meeting its debt obligations,” Jet Airways said in the statement.

Credit rating agencies maintain they receive only a monthly report from banks, which so far has showed no default by Jet Airways.

“As mandated by SEBI vide its circular dated June 30, 2017 on ‘Monitoring and Review of Ratings by CRAs’ we obtain a No Default Statement (NDS) from all rated issuers at the end of every month. We can confirm that we have received the NDS from Jet Airways at the end of every month during the period mentioned,” Anjan Ghosh, Group Head - Corporate Sector Ratings at ICRA, told BusinessLine.

Credit rating agency CARE ratings also said it did not receive any default statements from banks about Jet Airways.

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Published on August 13, 2018
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