Corp Bank, OBC, UBI still at a distance to get refund from Airbus

KOLKATA: Corporation Bank, Oriental Bank of Commerce (OBC) and United Bank of India (UBI) may be sensing victory against Airbus as debt recovery tribunal has directed the French aircraft maker to deposit with it Rs 192.5 crore it had received from these Indian lenders, but they are unlikely to get the refund in a hurry, going by the past experience of the functioning of DRTs.
If the banks get the refund within December 31, it would boost their third quarter earnings.

While, banks won against Airbus this round, they will get the refund only if the final verdict goes to their favour. The payment will directly boost their net profit numbers as the loan has been covered by provisions.

The next hearing of the case is scheduled on December 7, a senior executive in UBI said. “All the lenders are asked to file an evidence on affidavit and then, the next date will be given,” he said. Evidence on affidavit is a legal term whereby a petitioner swears by the statement and documents it had submitted earlier.

OBC, the lead bank for this particular loan, is supposed to get Rs 67.19 crore out of Rs 192.5 crore, while UBI and Corp Bank are to get Rs 63.18 crore and Rs 62.13 crore respectively.

These banks had made a pre-delivery payment of Rs 192.5 crore to Airbus on behalf of Kingfisher Airlines under a tripartite agreement between them in 2005. The order was subsequently cancelled when Vijay Mallya-owned Kingfisher was grounded in 2012.

DRT Bangalore Presiding Officer K Srinivasan on October 18 directed Airbus to deposit Rs 192.5 crore to it from any source within eight weeks.

Earlier in 2014, DRT Bangalore had passed an order for attachment of the money lying with Airbus following which the aircraft maker had appealed to debt recovery appellate tribunal Chennai saying that DRT Bangalore has no authority to pass the order it has no jurisdiction over this case.

Since then, the case was pending at Chennai DRAT as no hearing took at the successive scheduled dates due to shortage of manpower.