Still a long wait for banks to get Airbus refund

KOLKATA: Corp Bank, OBC, UBI await final verdict; refund to boost nos.

Corporation Bank, Oriental Bank of Commerce and United Bank of India may be sensing victory against Airbus as a debt recovery tribunal has directed the French aircraft maker to deposit with it Rs 192.5 crore it had received from these lenders, but going by the past experience of the functioning of DRTs in India, the banks are unlikely to get the refund any time soon.

However, if they get the refund by December 31, it would boost their third quarter earnings.

The next hearing of the case is scheduled for December 7, said a senior executive with United Bank of India (UBI). “ 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.

Oriental Bank of Commerce (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 Corporation Bank are to get Rs 63.18 crore and Rs 62.13 crore respectively. While banks have won this round against Airbus, they will get the refund only if the final verdict goes in their favour. The payment will boost the banks' profit numbers as their loan would have been covered by provisions.

These banks had made a predelivery payment of Rs 192.5 crore to Airbus on behalf of Kingfisher Airlines under a tripartite agreement between them in 2005. The order was later cancelled when Vijay Mallyaowned Kingfisher was grounded in 2012.

DRT Bangalore Presiding Officer K Srinivasan had on October 18 directed Airbus to deposit the amount with it from any source within eight weeks.