Mallya’s extradition: What does it mean for the banks

Vijay Mallya has been arrested in London by Scotland Yard on India’s request for his extradition. The motion was filed last month and was sent to district judge for further action. Vijay Mallya, a wilful defaulter, had fled the country to avoid various cases against him
 
Mallya's company Kingfisher Airlines owes more than Rs 9,000 crore to a consortium of 17 banks led by SBI
(State Bank of India). Recently, in an effort to liquidate the assets of Vijay Mallya, the banks had auctioned his villa in Goa for Rs 85 crore, which had initially failed to get any bid. However, it was later sold at Rs 73 crore.
 
In December last year, SBI had written off assets worth Rs 7,016 crore of 63 wilful defaulters, led by Mallya’s assets worth Rs 1201 crore. State Bank of India has the highest share in defaulted asset worth Rs 1400 crore, followed by IDBI Bank at Rs 727 crore and Bank of Baroda at Rs 530 crore. These banks have exhausted all their options of recovering their money from the sale of assets personally pledged by Mallya to avail loans for Kingfisher Airlines.
 
The relief for banks in this case depends on how early the UK government sends back Mallya to India. Mallya’s has secured bail after today's arrest, which may further extend his arrival in India.