This one step by RBI led Vijay Mallya to lend huge amount

India’s biggest banks, who are pressurising on return of Vijay Mallya to India, say they cannot be blamed for inaction towards Mallya in the debt case.

In 2010, the RBI (Reserve Bank of India) had taken a decision to widen the corporate debt restructuring scheme.

As per experts, this was done to resurrect the ailing Indian aviation industry, which also sent out a message to extend more loans to shore up Mallya's ailing Kingfisher Airlines.

As per a report by Economic Times, banks restructured loans after RBI’s nod and an independent agency’s assessment.

"Banks restructured loans based on two factors - RBI permitted to do so and second, based on an assessment from an independent agency, SBI Caps, which endorsed that restructuring of Kingfisher Airlines loans would revive the company," Pradeep Ramnath, former chairman of Corporation Bank, told ET.

READ ALSO: ‘You have blood on your hands’, employees of Kingfisher Airlines write to Mallya as he owes Rs 300 crore in salary

On the contrary, many experts feel the RBI cannot be put under spotlight as the central bank was trying to revive the Indian aviation industry from the slump.

"RBI can't be faulted because loan restructuring was one of the steps taken over a span of couple of years to revive the airline sector," an analyst with a domestic brokerage told ET.

The Enforcement Directorate has summoned Vijay Mallya and he has a week’s time to appear before the agency.