1. Home
  2. Business
  3. IDBI Bank to declare Kingfisher Airlines

IDBI Bank to declare Kingfisher Airlines a 'wilful defaulter'

India TV Business Desk August 18, 2014 13:04 IST
India TV Business Desk
New Delhi: Public-sector lender IDBI Bank has started the process of declaring liquor baron Vijay Mallya's Kingfisher Airlines as a wilful defaulter. The bank has a Rs 750-crore exposure to the grounded airline.

IDBI bank also said that it has not been questioned by the Central Bureau of Investigation, though the agency had sought some information from it.

Kingfisher is the country's top loan defaulter with banks having an exposure of Rs 7,000 crore.

Earlier, Kolkata-based United Bank of India also served a notice on the airline asking why it should not be named a wilful defaulter. Kingfisher Airlines has moved court against the notice. Also, State-owned United Bank of India has a Rs 400-crore exposure to the airline.

The Reserve Bank of India defines wilful default as a situation where an entity does not pay lenders even though it has the capacity to do so, or when it does not use funds for the purpose a loan was given.

Kingfisher has a total debt of about Rs12,000 crore (with interest on a principal of about Rs 8,000 crore). It had taken loans from a consortium of 17 banks. SBI has given almost Rs 1,500 crore to Kingfisher. The CBI is waiting for the response of SBI and other banks to take further action against Kingfisher.