Unitech says servicing LIC loan; to clear it by March-end: report

Mumbai February 28, 2014:- Real estate developer Unitech has claimed that it has been regularly servicing the Rs. 200-crore loan it had taken from LIC, even though a senior official of the life insurance major said they are looking into the account as it is a very serious matter.

The company also said it will clear all the dues by the end of the fiscal. There were media reports quoting unnamed LIC officials having declared Unitech as a “wilful defaulter”.

“We are repaying all the dues on time and by March-end, we will clear all the dues,” a company official said.

Last week, in a filing to the BSE, the realty company had said, “Requisite steps have been taken by it to ensure that no pendency with the LIC that will be reflected in the financial results and/or financial statements, which are due at the end of this financial year.”

Last December, LIC had issued a notice to the real estate developer after it defaulted on one of the instalments. Unitech had taken Rs.200-crore loan from LIC in 2007 for a project in Noida.

When asked regarding the status of Unitech’s loan, a senior LIC official remained non-committal regarding the status, but added that they are looking into it.

“This is a serious matter. We are looking into it, but would not be able to comment on it for now,” the official said.

Concerned over rising bad loans, RBI Governor Raghuram Rajan had asked banks to be strict in dealing with loan defaulters.

Last week, RBI’s senior most deputy governor K C Chakrabarty had said, “We are very sure that banks have to take quick action about the existing stock of NPAs. They have to take some debt cuts, and they have to do it very quickly. And, if they do not do, then as a regulator, we will make their cost higher.”