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Paramount Airways owes around Rs450 crore to an SBI-led consortium of banks which includes Bank of India, Central Bank of India, IDBI Bank, Indian Bank and Andhra Bank. Photo: Hemant Mishra/Mint (Hemant Mishra/Mint)
Paramount Airways owes around Rs450 crore to an SBI-led consortium of banks which includes Bank of India, Central Bank of India, IDBI Bank, Indian Bank and Andhra Bank. Photo: Hemant Mishra/Mint
(Hemant Mishra/Mint)

SBI objects to Paramount’s revival plan over dues

SBI chairman Pratip Chaudhuri says Paramount Airways defaulted on around Rs100 cr loan

Mumbai: State Bank of India (SBI) has written to aviation regulator Directorate General of Civil Aviation (DGCA) expressing concern over the grounded Paramount Airways’ plans to re-launch the carrier, saying it has been in default for long.

“Yes, we have written to the DGCA expressing our concern, as the company has been in default for long. We informed them of the arrears that the airline promoters owe us and other banks," SBI chairman Pratip Chaudhuri told PTI.

“They have defaulted on around Rs100 crore loan we have extended to them (since late 2008). Currently, we are in the recovery process," he said.

Paramount owes around Rs450 crore to an SBI-led consortium of banks which includes Bank of India, Central Bank of India, IDBI Bank, Indian Bank and Andhra Bank.

However, when contacted, M. Thiagarajan, promoter and managing director of Paramount Airways told PTI that he had cleared the dues to SBI on 22 May 2013, except for some penal interest which he is trying to get waived. He even said he had received a no-dues certificate from the SBI in this regard. But, when contacted, SBI denied any such payment and clarified that the said no-dues certificate was issued by the Sengapadai branch in rural Tamil Nadu against the company’s current account, and it has nothing to do with defaulted loan.

“The company owes us Rs85 crore in principal and there is also unapplied interest, which together come around Rs100 crore. The purported no-dues certificate was issued by the Sengapadai rural branch against the company’s current account," SBI deputy managing director for stressed assets management Soundara Kumar said.

“SBI has obtained a restraint order from the Madras high court against renewal of Paramount’s flying permit by the DGCA. The matter is still in court. The company owes us money. If the flying permit is being sought on the basis of this above mentioned letter, then it is improper and is misrepresentation of facts," she said. Kumar also said, the bank would be moving the DGCA again on this matter.

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