IDBI Bank To Tag Debt-ridden Kingfisher Airlines Wilful Defaulter

IDBI Bank, the Indian government-owned financial service bank, has started the process of declaring Kingfisher Airlines a ‘wilful defaulter’. The beleaguered airline owes the bank Rs 750 crore. Kingfisher is the country's top loan defaulter with banks having an exposure of Rs 7,000 crore.

After a report by Ernst & Young (E&Y) pointed to gaps in Kingfisher’s running, other banks like SBI (the lead bank for the airline’s loan) and Punjab National Bank are also ready to declare it a wilful defaulter. United Bank of India is also part of the consortium. It has already initiated process to declare the company a defaulter.

IDBI Bank chairman and managing director MS Raghavan said, "The process is in an advanced stage and we would send out a notice declaring them as a wilful defaulter in a couple of weeks. Last week, we submitted all papers relating to the account, such as statement of accounts, account opening form and cheque books, to the CBI for the agency to start a preliminary enquiry against the company."

Raghavan stated that the Rs 750 crore owed by Kingfisher Airlines to IDBI Bank is currently a bad debt in the books of the bank. "It is an NPA (non-performing asset) and has been fully provided for by the bank," he said.

IDBI is looking to raise Rs 5,000 crore by paring down the government of India stake in it, added Raghavan. The bank is targeting a growth of 12% in its deposits and 15% in advances and planning to expand its network to 2,000 branches by the end of this fiscal year, he concluded.
(Image: indiatimes.com)