Court issues non-bailable warrant against Vijay Mallya

The special court in Mumbai, hearing cases under the Prevention of Money Laundering Act (PMLA) today issued a non-bailable warrant against Vijay Mallya after the Enforcement Directorate (ED) sought action against the liquor baron for repeated nonappearance before the court.

Mallya, who is facing court cases in the Rs9,000 crore overdue loan that the defunct airliner Kingfisher owes a consortiun of 17 banks led by State Bank of India.

The arrest warrant follows the revoking of Mallya's diplomatic passport by the ministry of external affairs on 15 April.

Meanwhile, Mallya has rejected new allegations of moving about Rs430 crore of bank loans to acquire assets abroad.

Kingfisher Airlines is also reported to have filed an application to clarify things after reports suggested that Rs 430 crore was used to acquire assets outside the country.

It now seems that the Mallya case will be tough for the agencies and the 17 large banks that lent money to the airline to solve after he missed his third and last summons to appear before the ED on 9 April.

Even if Mallya returns and faces the law, it wouldn't be easy for the banks to recover the amount at stake.

Earlier, a Hyderabad court had issued four NBWs in a cheating case against Mallya. But, his arrest will depend on whether the authorities will be able to deport him from the UK.

Mallya has been in London since early March and is fighting cases through his lawyers in India on multiple charges of collusion in bank loan allotment, money laundering and other cases.

Mallya, however, is just one of the many wilful defaulters in India's stress-ridden banking sector.

According to RBI data 27 public sector banks have written off about Rs1,14,000 crore of bad loans in fiscal year 2012-15.

Besides the declared bad loan cases, there are possible cases of hidden bad loans on the balance sheets of banks in the form of restructured loans.

However, banks cannot continue to masquerade bad loans in the restructured loan segment to show a healthier balance sheet with RBI revising its stressed assets guidelines.