State Bank of India Chairperson Arundhati Bhattacharya on Saturday said the process of recovery of dues from Vijay Mallya-promoted Kingfisher Airlines is going on, ‘but there are legal challenges.’
"Kingfisher is currently a non-operative account and we don't want to discuss individual accounts.
“Whatever are the steps necessary for recovery, they are going on, but there are some steps that will take time because there is a legal system to negotiate with, and obviously there are legal challenges.
“So we are looking at that," she told reporters in Bengaluru.
SBI leads a 17-member consortium of lenders that is trying to recover dues running into over Rs 7,500 crore (Rs 75 billion) in principal alone from Kingfisher Airlines.
SBI has the maximum exposure of Rs 1,600 crore (Rs 16 billion) to the airline, which has been grounded since October 2012.
Asked how much the bank has recovered from the sale of Kingfisher Airlines' shares, she said, "Nothing very much. I think the recovery is in the range of Rs 350 to Rs 400 crore (Rs 3.5-4 billion)."
Asked about recovering the balance, she said, "I have fully provided from our profits."
SBI Capital Markets Ltd has been tasked by the consortium of lenders to recover their dues.
Punjab National Bank and IDBI Bank each have an exposure of Rs 800 crore (Rs 8 billion) each to Kingfisher, Bank of India Rs 650 crore (Rs 6.5 billion) and Bank of Baroda Rs 550 crore (Rs 5.5 billion).
Among the others, United Bank of India has Rs 430 crore (Rs 4.3 billion), Central Bank of India (Rs 410 crore or Rs 4.1 billion), Uco Bank (Rs 320 crore or Rs 3.2 billion), Corporation Bank (Rs 310 crore or Rs 3.1 billion), State Bank of Mysore, (Rs 150 Crore or Rs 1.5 billion), Indian Overseas Bank (Rs 140 crore or Rs 1.4 billion), Federal Bank (Rs 90 crore or Rs 900 million), Punjab & Sind Bank (Rs 60 crore or Rs 600 million) and Axis Bank (Rs 50 crore or Rs 500 million).
Lenders outside the consortium are Srei Infrastructure Finance (Rs 430 crore or Rs 4.3 billion), Jammu & Kashmir Bank (Rs 80 crore) and Oriental Bank of Commerce (Rs 50 crore (Rs 500 million).
On SBI's efforts to merge some of its subsidiaries, Bhattacharya said the bank is not looking into it at the moment and would see how things develop after the elections.
"At this point of time, we are not really looking into it. We will see how things go once the new government is formed and we want to understand what they would like us to do," she said.
SBI and its associate banks already have the same technology platform and accounting principles, she said.
Before going into the merger, the bank needs to align the HR practices adopted by the associate banks, she said.
She said SBI planned to expand its operations in rural areas to ensure financial inclusion in the country.
The hub and spoke system would be strengthened through business correspondents to provide banking services in villages, Bhattacharya said.
The bank has 90,000 business correspondents now who reach out to villages with mini-ATMs, accepting deposits, recovering loans and providing withdrawal facilities, Bhattacharya said.
She said more such banking services will be added in the coming days.
Speaking about corporate social responsibility, she said the bank spent Rs 142 crore (Rs 1.42 billion) in 2012-13 for corporate social responsibility.
She added that 47,041 people were imparted vocational training and 24,535 of them were either provided placement or finance for self-employment ventures.