SBI’s Rajnish Kumar Slams ‘Selfish’ Private Sector Bank For Altico Capital’s Issues
Rajnish Kumar, chairman of State Bank of India. (Photographer: Dhiraj Singh/Bloomberg)

SBI’s Rajnish Kumar Slams ‘Selfish’ Private Sector Bank For Altico Capital’s Issues

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State Bank of India Chairman Rajnish Kumar has criticised a “selfish" private sector bank for issues at Altico Capital India Ltd. as its unilateral move to secure its own money can potentially cause troubles to the wider financial system.

On Friday, a day after Altico Capital defaulted on payments to Dubai-based Mashreq Bank PSC, HDFC Bank Ltd. netted-off the Rs 220 crore held by Altico Capital in the bank’s fixed deposits against outstanding term loans which the real estate NBFC owed to the lender, BloombergQuint quoted two people as saying in a Sept. 14 report.

HDFC Bank had extended about Rs 260 crore in term loans to Altico Capital.

Altico Capital has claimed that the transaction was not in good faith. According to the first of the two people quoted in the report, Altico Capital is currently seeking legal advice on initiating proceedings against the bank for carrying out this transaction.

Over the weekend, SBI Chairman Kumar told reporters if any bank makes a selfish move, it can have a negative impact on the rest of the system. “You have taken care of the Rs 50-100 crore (exposure), and felt happy for saving your money, but if you are damaging the system, then it is not proper," Kumar said, without naming the private sector bank.

Also read: The Behind-The-Scenes Story Of Altico Capital’s Default

Even in the case of the biggest of the companies, if a bank pulls the trigger or stops credit flow, the negative impact can come, he added. The need is for bankers to mount coordinated efforts which help the entire financial system, Kumar said, pointing out that the same is being used for biggest of the stressed cases.

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