Vijay Mallya may have declared his willingness to settle with the banks in a recent interview to Financial Times, but State Bank of India (SBI) chairperson Arundhati Bhattacharya says his willingness to pay will have to be tested.
In an exclusive interview from Frankfurt on the sidelines of the annual Asian Development Bank (ADB) meet, the SBI chief said, “The willingness seems to be there, we will have to test that out. I want to see actual cash… I don’t want to see ifs and buts.”
Mallya says he made very “serious” offer to the banks, but the SBI Chairman says the offer was rejected because they did not have an understanding of his ability to pay the loan. “We did not have a proper understanding of the paying capacity. Unless and until we know the assets of the person how are we to realise the paying capacity. That is what we’ve been asking for time and again, ultimately the highest court in the land did give it to us,” she said.
Banks, she says, will arrive at a one-time-settlement after assessing the paying power and the value of the loan. “The bank takes a call as to this is the maximum amount one can get. We also try to do what is a net present value to see whether it is a fair deal.”
Talks with Vijay Mallya are ongoing and banks want to settle whichever way is possible. “The fact of the matter is we need to settle it, we do realise that. It is part of any cycle, exceptions are not being made only for one person or for big industry or small industry – it is there across the board, we do it for everybody,” she said.
In the interview to Financial Times, Vijay Mallya has contested the figure of over Rs 9000 crore that he owes to the banks calling it a creation of the media. SBI chief told NDTV that the principal amount he owes is “around Rs 5,000 crore,” but that final amount keeps changing because “once you take a loan, the interest meter doesn’t stop ticking. The interest gets compounded ever quarter.”