State Bank of India (SBI) has clarified that loans extended to Jet Airways is a standard as repayments are regular, clearing the confusion that started during the earnings teleconference in which the bank’s management said the account is in the special mention accounts (SMA) category.
During the teleconference SBI management said the account is in the ‘watch list’ and either in the SMA 1 or SMA 2 category, without disclosing further details.
If interest or principal repayment is due for more than 30 days, the loans are classified as SMA 1 category and if overdue for over 60 days (but less than 90 days), it is in the SMA 2 category. After 90 days of overdue, a loan becomes sub-standard - the first category on non-performing asset.
Following SBI’s comments, Jet issued a statement saying it’s account is standard.
“We are regular in all our payment obligations to all our banks and statutory dues including PF obligations. Our account with all the banks as on date is “Standard”. Information of Jet Airways being placed in the SMA1 and SMA2 category is incorrect,” the airline said.
When The Hindu contacted a senior SBI official asking about Jet’s statement, the official said, there was a miscommunication earlier and the account is indeed standard and not in the special mention category.