We are not lenient with Kingfisher, says SBI
Posted on: 08:14 PM IST May 28, 2012
Bangalore: State Bank of India (SBI) on Monday said it is not lenient with Kingfisher Airlines and treats it at par with Air India and Jet Airways.
"We are not lenient with Kingfisher and are treating it at par with Air India and Jet Airways," SBI Chairman Pratip Chaudhuri told reporters in Bangalore.
There is no room for further debt and Kingfisher must bring in capital, he said.
He added that it is for the government to decide on changing the FDI rules to allow private airliners to raise capital. "The company has been told that if FDI rules are changed it becomes easier for them (to raise capital)."
Kingfisher needs to get more equity and the sooner they get it the better, he said, adding that loans given to the airline are not much fund-based, but in the form of bank guarantees to oil companies so they could keep supplying fuel to them.
"If we call off the guarantees or discontinue it, the whole fuel chain supply would stop. If we precipitate the action it will endanger jobs and connectivity in the country. So, we are working with the company," he said.
The aviation sector is under stress and companies with good amount of equity can hope to navigate troubled times, he said.
He said depericiation in rupee's value would not have impact on banks. "Depreciation in rupee will not bear an impact on banks."
Chaudhuri said rupee depreciation would impact profitability importing customers, but export customers would enjoy the advantage.
"... we have seen a high increase in remittences from Indians abroad from their NRI accounts," he added.