UCO Bank, a part of the consortium that had lent money to ailing Kingfisher Airlines, has declared the airline’s account as a non-performing asset (NPA).
In an interview with CNBC-TV18, the bank’s chairman, Arun Kaul, said that if Kingfisher’s account had to be regularised (become a viable asset), the airline would need to at least repay the interest on its loans. He added that the bank would not lend any further funds until the viability of the airline is assessed.
The bank would not lend any further funds until the viability of the airline is assessed.Reuters
On Wednesday, State Bank of India confirmed that there are no plans to lend further to the ailing airline, whose debts have already turned into an NPA for the bank. SBI sources told CNN-IBN that the public sector bank does not want to send out wrong signal to its customers by providing a lifeline to the airline. Earlier, reports said SBI had agreed to a 1,650 crore financial package.
Kingfisher has borrowed over Rs 1,400 crore from SBI.
In all, Kingfisher owes Rs 7,000 crore to several lenders, including SBI.
On Wednesday, the government said it was adopting a ‘hand-off’ approach on decisions to provide new bank loans to Kingfisher, adding that it was up to banks to decide.
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