JOIN USIn further clampdown on Vijay Mallya, state-run Punjab National Bank has declared him as well as his group firms UB Holdings (UBHL) and long-grounded Kingfisher Airlines as "wilful defaulter".
While the embattled UB Group said it is consulting with lawyers to challenge the decision, PNB insisted loans must be paid back in the larger interest of the country.
PNB is the third public sector bank to declare the air carrier and its two guarantors - United Breweries (Holdings) Ltd and flamboyant Mallya - as wilful defaulters. Earlier, United Bank of India and SBI had done the same.
Punjab National Bank vide letter dated February 11, has declared the company a "wilful defaulter", UBHL said in a BSE filing, adding it received the letter on Monday.
"The company is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard," UBHL said on its future course of action.
PNB had an exposure of Rs 800 crore to the airline, which had to close shop under huge debt burden and payment defaults.
When asked about steps being contemplated by PNB to recover money from Kingfisher and deal with the problem of wilful defaulters, PNB chief Usha Ananthasubramanian told PTI, "When people have the wherewithal to pay, they must pay. There are people who have money yet they don't want to pay."
In November last, SBI had declared Mallya, Kingfisher Airlines and UBHL as wilful defaulters.
A bank consortium led by SBI has decided to auction Kingfisher House in Mumbai on March 17 this year in a bid to recover a part of Rs 6,963 crore debt due from Kingfisher.
"Wilful defaulters also blocks your (banks as well as general public) access to finance," Ananthasubramanian added.
The bank has already invoked all the recovery mechanisms like Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act with regard to Kingfisher, Mallya and UBHL, she said.
"We have also filed recovery suit in the Debt Recovery Tribunal and all the legal steps have to be taken," she added.
As per RBI guidelines, once declared as wilful defaulters, no additional facilities will be granted to these borrowers by any bank or financial institution.
Besides, such companies and promoters) will be debarred from institutional finance for floating new ventures for a period of 5 years from the date of removal of their name from the list of wilful defaulters.