13/03/2016 8:17 AM IST | Updated 15/07/2016 8:26 AM IST

Vijay Mallya Defaulted On Loans For Several Reasons, Says Raghuram Rajan

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Raghuram Rajan, governor of the Reserve Bank of India (RBI), reacts during a Bloomberg Television interview at the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 21, 2016. World leaders, influential executives, bankers and policy makers attend the 46th annual meeting of the World Economic Forum in Davos from Jan. 20 - 23. Photographer: Simon Dawson/Bloomberg via Getty Images

NEW DELHI -- Reserve Bank of India ( RBI) Governor Raghuram Rajan on Saturday said that there were a variety of reasons why loans went bad in the case of Vijay Mallya, adding that the focus should be on the road ahead instead of dwelling on what should have been done.

Answering in response to a question asked at the Ramnath Goenka event here, Rajan said, "There are a variety of reasons why loans have gone bad. Let's not get into what should have been done. Lot of sensible entrepreneurs structured it in an optimistic way. Let's not get into what should have been done (Kingfisher case). There is no space to allow malfeasance."

"We have to be careful and have to go after cases which have malfeasance. We can't have someone who laughs away to the banks. The law should be allowed to operate. Default is not an evidence of malfeasance," he added.

Also Read: Vijay Mallya Tweets He Is Not An Absconder, Will Comply With Law

The Securities and Exchange Board of India (SEBI) yesterday decided to bar the wilful loan defaulters from raising public funds through stocks and bonds as also from taking board positions at listed companies.

The move taken by SEBI comes after a raging controversy over Mallya, who has exited the country amid continuing efforts by the banks to recover dues totalling over Rs. 9,000 crore of unpaid loans and interest.

Earlier, the CBI admitted that the first lookout notice for Mallya's detention at the country's exit points was issued in error.

The Supreme Court had on Wednesday brushed aside a plea by Attorney General Mukul Rohatgi to direct Mallya to appear personally before the court to force him to come back to India.

The case will be next heard on 30 March.

The SBI, which leads a consortium of 17 lenders to King Fisher Airlines, declared Mallya wilful defaulter last month. Besides the SBI, United Bank of India (UBI) and the Punjab National Bank (PNB) have also declared Mallya as wilful defaulter.

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