‘Jet one of the most challenging cases of my tenure,’ says ex-SBI Chairman Rajnish Kumar

Former SBI Chairman Rajnish Kumar said that dealing with Jet Airways’ resolution was one of the most difficult assignments that he had faced during his term as the chief of the country’s largest lender. In a book titled ‘The Custodian of Trust’, Kumar said that most banks were extremely reluctant to support a resolution plan for Jet.

"For me too, this was one of the most challenging cases with even the SBI board being uncomfortable in backing me on this issue, not because I did not enjoy their support or goodwill but because they felt that it posed a huge risk to the reputation of the bank,” he wrote.

He added that SBI’s board members wanted a letter of support from the government before giving a nod to the resolution plan. "Consequently, they did not want to be party to such a decision without receiving an explicit letter of support from the Department of Financial Services (DFS) or the MoCA (Ministry of Civil Aviation). I had not faced such a difficult situation throughout my two-year long tenure at the helm of affairs at SBI, but I viewed it as a major learning experience that came in handy in resolving the YES Bank crisis," he said.

Jet had to stop operations on April 17, 2019. Kumar in his book published by Penguin Random House India called it a sad day in the history of civil aviation in India.

The Mumbai bench of the NCLT in June 2019 submitted an insolvency petition against Jet Airways filed by the lenders' consortium led by State Bank of India (SBI). Jet owed over Rs 8,000 crore to a consortium led by SBI, apart from Rs 25,000 crore of liabilities towards its vendors.

The ex-SBI Chairman admitted that he has little hope for the revival of the airline as there are hardly any assets and as its planes are mostly taken on lease and slots are the property of airports.

"Unlike the RBI, which has wide-ranging powers for rescuing a financial entity, the aviation sector has no such authority. The financing of airlines remains a high-risk business for banks, as has been repeatedly proven by the losses incurred by banks in high-profile cases like the failures of Kingfisher Airlines and Jet Airways," he stated.

(With agency inputs)

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