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.
Tag: state bank of india
Kingfisher Airlines and loan
Vijay Mallya is known as king of good times. He owns an IPL team. He owns a Formula One team. He constructs a multi-storeyed building beside a road named after his father. He hires models and has photoshoots outside India for his calendar. For all that he has money. He has no money to pay loan taken by Kingfisher Airlines which he owns. The airline has a loan of 6,000 crore rupees and he wants government to bail him out. Civil Aviation Minister Vayalar Ravi is ready to help him. Vayalar Ravi said â€œThe aviation industry is facing crisis. These carriers may be privately owned but are Indian carriers, and the ministry will have to watch out for them.â€
Banks and loans
In 1953 or thereabout the government of India nationalized Imperial Bank and changed its name to State Bank of India.
In 1969 the government of India nationalized 14 banks. In later years more banks were nationalized.
Some years back there was a proposal to nationalize those banks as they were making losses. The employees protested saying there were not responsible for losses.
The banks had lent to many industrialists who had not repaid the loan and that was the reason for losses. Many industrialists in India would have gone bankrupt years ago if banks had insisted on payments.