Voice from the Rooftop

Blog of Vincent Augustine D'Souza

SBI and Hotel Leela

SBI did not get back the loan it gave to Kingfisher. Kingfisher was bailed out by converting the loan into shares. Now comes the news that SBI has referred 4,300 crore rupees loan taken by Hotel Leela to corporate debt restructuring (CDR). It is said that Hotel Leela has not defaulted. It wants interest rate reduced from 14% to 11% and longer schedule for payment. Perhaps the owner of Hotel Leela thinks he can default and get away just like Vijay Mallya of Kingfisher did. Hotel Leela perhaps wants the same treatment. Who is next in line for default? How is that SBI gave thousands of crores of rupees as loan and unable to recover them? Pilots of Air India and Jet Airways are likely to go on strike. Will SBI and other public sector banks bail out every airline, hotel, tea estate and so on? SBI and other public sector banks are not private property of Manmohan Singh, Veerappa Moily, Congress or UPA.

What is going on? Where are people who speak against loan write-offs, freebies and subsidies? Where are economists who speak of fiscal deficit?

There was no discussion on TV channels about CDR to Leela. What are they waiting for? Will they discuss after Leela defaults and asks for another loan?

SBI should stop CDR. Those who borrow must pay as per agreement. Interest should not be reduced. Payment period should not be extended. Hotel Leela must have pledged something as collateral for loan. SBI should attach the collateral.

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