SBI warns of stringent action against Kingfisher Airlines

State Bank of India indicated on Monday that it was taking all steps to recover the debts from Kingfisher Airline in which its loan size was Rs 1,600 crore while the total exposure of all the banks to the airline was Rs 6,000 crore.

“We have already initiated action to recover our money. The bank will take stringent steps if necessary and we are confident of recovering all our money from Kingfisher,” said SBI chairman Pratip Chaudhuri here on Monday.

On new banks
Welcoming the Reserve Bank of India’s decision to allow private players to open new banks, Chaudhuri said, this would not impact the SBI much as its market share currently was about 17 per cent in the country.

He said, merger of the five associated banks might take about 10 years and would cost Rs 1,200-2,500 crore for each bank. State Bank of Saurashtra would be merged first in the next two years.

On Monday, the bank opened a specialised currency administration branch here, a first-of-its-kind in Andhra Pradesh. The branch would gradually take over the functions of other currency chests of the SBI and would cater to the entire currency requirements in Vizag. It also donated three ambulances to the Indian Red Cross Society, Philadelphia Community Services and Nice Foundation.

Meanwhile, the SBI has sanctioned a loan of Rs 2,500 crore to Visakhapatnam Steel Plant to fund its expansion plans.

Speaking to reporters here, Chaudhuri said that this was the single-largest corporate loan given to Vizag Steel Plant. The bank is charging between 9.7 per cent and 9.95 per cent interest depending on the period.