SBI, PNB Start Auctioning Rs 5600 Crore Properties Of Vijay Mallya: How Will This Work Out?
In a positive move towards banks, the Prevention of Money Laundering Act (PMLA) court in Mumbai on Tuesday, allowed a consortium of eleven banks to recover their dues loan amount given to the now defunct Kingfisher Airlines, by selling assets of disgraced businessman Vijay Mallya, seized by the Enforcement Directorate (ED).
The PMLA court has given the green signal for the consortium of lenders to auction Mallya’s properties, in order to restore their loan dues of amount worth over Rs 5,600 crore.
Group of 11 Banks to Auction Mallya’s Assets
A consortium of 11 lenders, led by the State Bank of India had approached the PMLA court in Mumbai, seeking restoration of fugitive Vijay Mallya’s properties seized by the ED so that they could use them to recover their loans given to Kingfisher Airlines.
The court on Tuesday gave a green signal to these banks.
This means that the consortium of 11 banks can now sell certain real estate properties and securities, which belonged to disgraced tycoon Vijay Mallya, to recover dues loan amount of about Rs 5,646.54 crore, which was initially seized by the ED.
Mallikarjuna Rao, Managing Director, Punjab National Bank says, “Now the lead bank will sell those properties. PNB doesn’t have much loan exposure in Kingfisher, but we will get our due share whatever once lead bank to realize.”
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is guiding the recovery process, while selling those properties would be done as per the guidelines in due course of time.
Reports state that the banks will take up symbolic possession of the properties mentioned in the court order following due legal procedure.
Of the original loan amount of Rs 6,900 crore to the Kingfisher Airlines, SBI has the highest contribution, to the tune of Rs 1,600 crore.