How IDBI Bank flouted RBI rules to aide Vijay Mallya
Synopsis
Kingfisher had applied for a corporate loan of ₹ 750 crore to IDBI Bank on October 1, 2009 which did not get processed. After that Mallya met CMD of IDBI Bank Yogesh Aggarwal on October 6 and said that he can make do with a loan of ₹ 150 crore. The very next day, the loan was sanctioned by the bank.
Eight former officials of IDBI bank and Kingfisher Airlines were arrested last week after the Central Bureau of Investigation (CBI) filed a chargesheet. CMD of IDBI Bank Yogesh Aggarwal was also arrested in this process. Vijay Mallya was named an absconder too by the CBI.
All of this happened after CBI found out that IDBI Bank flouted a number of rules to grant Mallya’s Kingfisher a loan of ₹ 1,000 crore. CBI sources have confirmed that IDBI flouted RBI rules and paid the money to Mallya in three parts despite Kingfisher’s condition and its low credit rating in the market.
Kingfisher had applied for a corporate loan of ₹ 750 crore to IDBI Bank on October 1, 2009. That application did not get processed. Post that Mallya met Aggarwal on October 6 and said that he can make do with a loan of ₹ 150 crore. The very next day, the loan was sanctioned by the bank. Yet again in November, Mallya applied for another short loan and that application too got approved on the same day.
The credit committee of the bank was supposed to meet to consider Kingfisher’s loan later that month. In order to get those short term loans approved, Kingfisher had to pledge some its shares as well.
In a turn of events, Mallya mailed Kingfisher’s Chief Financial Officer Raghu Nathan that they will not have to pledge their shares as the CMD of the bank said it was not needed. CBI has confirmed that ₹ 263 crore went out of the country to pay off Kingfisher’s previous dues.
Probes have been initiated against Mallya for defaulting on loans worth ₹ 9,000 crore. But Mallya feels that these fresh allegations are baseless and he has blamed the government services. He even said that these short term loans from IDBI Bank were not misused and CBI has evidences. However, he is still living in England since April 2016 and showed no signs to come back to India.
"Till this minute there is no final judicial determination on what KFA owes to Banks and what I may owe in my personal capacity after trial. Yet it is reported that I have fled or run away owing money to banks that I never ever borrowed in the first place," Mallya tweeted.