Cases Of Wilful Default Must Be Dealt With Firmly: Ficci

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Amid mounting pressure on beleaguered businessman Vijay Mallya over loan default, industry chamber Ficci said cases of wilful default should be dealt with in a firm manner, reported PTI.

Cases Of Wilful Default Must Be Dealt With Firmly: Ficci
The comment by the industry body comes against the backdrop of government's stern warning to 'wilful defaulters' like Vijay Mallya to settle their dues honourably with the banks or else be ready to face "coercive action" by lenders and investigative agencies.

"Cases of wilful default should be dealt with in a firm manner. The rules laid down for wilful default should be strictly followed," Ficci President Harshavardhan Neotia said in a statement.

"In case of projects where mismanagement on part of the promoters can be ascertained, promoters should be asked to bring in extra contribution by way of equity, failing which the asset may be taken up for resolution through any of the available or new institutional mechanisms," he added.

"I don't want to make any comments on individual cases but I think it's a responsibility of large groups like his (Vijay Mallya's) to honourably settle their dues with the banks," Finance Minister Arun Jaitley told PTI.

He further said that banks have certain collaterals of group companies of Vijay Mallya and will take legal action to recover dues that are in excess of Rs 9,000 crore.

Expressing concern on the rising non-performing assets (NPAs), Ficci said a strong banking sector is imperative for robust economic growth of the country and all stakeholders should work in a manner that the health of this sector is restored.

To address the problem of rising NPAs in the banking system, Ficci's National Executive Committee passed a resolution that the industry should join hands with banks for evolving workable solutions that are both remedial and preventive in nature.

The chamber observed that stressed assets in the banking system have different underlying factors and therefore need to be dealt differently on a case by case basis.

"Projects which have been affected owing to cyclical or global factors or where the project viability has suffered owing to policy/procedural impediments require support and restructuring," it said.

Mallya, promoter of long-grounded Kingfisher Airlines, had left India on March 2, presumably for London, days before the Supreme Court heard a plea of clutch of state-owned banks seeking recovery from his group firms.

Mallya and Kingfisher Airlines owed Rs 7,800 crore to a consortium of 17 lenders led by State Bank, which had an exposure of over Rs 1,600 crore to the now defunct airline.

Read more about: ficci, npas
Story first published: Tuesday, March 29, 2016, 8:10 [IST]
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