Money & Banking

‘Firing on all cylinders’ to recover Kingfisher dues: SBI chief

Vinson Kurian Thiruvananthapuram | Updated on May 28, 2013 Published on May 28, 2013

Pratip Chaudhuri, Chairman, SBI

Likely to merge an associate bank with itself during second quarter





A State Bank of India (SBI)-led consortium ‘is firing on all cylinders’ to recover loans advanced to grounded commercial airliner, Kingfisher.

“We’ve stepped on the gas,” said Pratip Chaudhuri, Chairman, SBI, who was here to preside over the annual general meeting of associate bank State Bank of Travancore.

ASSET SALE

According to Chaudhuri, among the assets Kingfisher has pledged with the consortium, there were some which were easier to sell. There were also others which come with assured transparency for discovering the price, as in share stock. There were still others, for instance (real estate) property, bridled with legal and other issues.

But the consortium will not relent and would go right ahead with the recovery programme, he added.

It has already invoked the Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act.

“Cut repo rate or pay interest on cash reserve ratio,” the SBI chairman said, flagging his pet theme ahead of the next policy review of the RBI.

BANK MERGERS

On merger of associate banks, he said SBI was actively pursuing the matter now that its capital has improved. “The tier-1 capital position is looking good at 9.7 per cent,” he said, adding that this has emboldened the bank to think of moving ahead with the proposal.

He, however, did not reveal the identify the target for merger. But the bank was holding a series of discussions with players left in the fray, of which, State Bank of Travancore is one.

Chaudhuri said that he expected to consummate merger one of the associate banks with the parent during the second quarter.

The economic logic was that matching employee compensation would mean an outgo of Rs 2,000-2,500 crore. This would need to be charged to the capital account.

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Published on May 28, 2013
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