SC to hear plea by bks seeking to stop Mallya from leaving India

"Well, I think it's not only a legal but a moral obligation that every banking institution in India has to recover the last pie," Jaitley said.

The government cannot accept a "situation where 15 or 20 people are sitting on so much money of the banks, that the ability of the banks to lend to thousands of others" get severely impacted, he said.

"Whatever steps the banks will take in this matter, the government of India will stand behind them but also actively encourage them to protect their own interest which is also the larger public interest because the public money is involved in the banks," Jaitley said.

"After all, I am taxing the people of India to put money into the capital of the banks," he added.

This came after the Debt Recovery Tribunal (DRT) barred Vijay Mallya from accessing USD 75 million (Rs 515 crore) exit payment from Diageo over the loan default case. The Enforcement Directorate also registered a money laundering case over a loan default with IDBI.

DRT, allowing a plea by State Bank of India, restrained Diageo from disbursing the money for now and set March 28 as the next date of hearing. The public sector bank had sought DRT's intervention in seeking the lenders' first right on the severance payout from Diageo.

Earlier, SBI had filed a plea seeking Mallya's arrest and impounding of his passport. Mallya's defunct Kingfisher Airlines owes Rs 7,800 crore to a consortium of 17 banks led by SBI.