Goodreturns :Monday, May 27, 2013, 9:40 [IST]
Fifteen Indian banks may have to shell out over Rs 4,000 crore
to international bullion banks on behalf of Winsome, a Mumbai-based jeweller, and walk away without any hopes of recovery due to the absence of adequate securities against exposures to the jeweller.
Media reports said that banks had released the corporate guarantees and mortgages of Winsome Group last year and now they have nothing left to cover their risk thanks to the "accelerated payment" provision in the gold loan agreement between Winsome and bullion banks.
As per that agreement bullion banks can invoke LCs well before due dates if they expect Winsome Group to default any time in future.
A report from the Economic Times said that banks like PNB, Union Bank of India, Canara Bank and Central Bank are among the 15 lenders who may take this Rs 4,000 crore hit as they had provided standby letters of credit (SBLC) facilities.
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