Friday, May 10, 2019

Taken disproportionate steps to keep Jet flying: SBI chief

Hours before the deadline for submitting binding bids for Jet Airways ended, State Bank of India (SBI) chairman Rajnish Kumar said the lender had taken ‘disproportionate’ efforts to save the troubled airline, even if it had only a ‘small’ exposure of ?1,600 crore.

Mr. Kumar made the comments at the earnings press briefing.

“It [Jet exposure] has 7 bps [impact] on gross NPA, if the size of the loan book is ?23 lakh crore, ?1,600 crore is 7 bps,” Mr. Kumar said, indicating that NPA from the Jet exposure was not a significant issue for SBI. As on March 31, SBI’s gross NPA ratio was 7.53%. SBI had made more provision than what was required on Jet Airways. “But I agree, being the leader of the consortium, [SBI] has made disproportionate effort to keep it flying. Otherwise, if it were any other account, we would have not even bothered about it,” Mr. Kumar said.

After the airline defaulted on repayment, SBI took the initiative on behalf of the lenders to prepare a bank-led resolution plan and started the sale process.When asked what prompted SBI to take such a disproportionate effort, Mr. Kumar said: “One was that SBI was the leader of the consortium. As a leader, it becomes more visible. It is a visible account because it was such an important airline for India. In the larger interests of the aviation sector and the Indian economy, you can say the effort has been disproportionate,” he said.
10/05/19 The Hindu
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