KINGFISHER AIRLINES WILL SOON BE DECLARED AS WILFUL DEFAULTER
Kingfisher Airlines, a brand name in itself, will soon be declared as deliberate defaulters by three major banks that are SBI, PNB and IDBI. As the airlines failed to clear its debts, the Department of Financial Services reviewed first 50 Non Performing Accounts (NPAs) in Public Sector Banks.
The head of Kingfisher Airlines, Vijay Mallya, has been accused of being unable to pay Rs 4,022 Crore given by collection of banks, headed by SBI. It also initiated the process of recovery from the company. United Bank of India, which is also a part of the consortium, initiated this procedure of declaring Kingfisher Airlines to be willful defaulter.
The reason behind calling the company ‘willful defaulter’ lies behind the criminal accusations on the company’s directors. With this, they will not be eligible to take any more loans from any bank or establish fresh ventures for 5 years.
According to guidelines by RBI, it needs to be proven that the lender has put to use the funds from the bank and failed to back pay even though it’s in a condition to pay. Also, IDBI Bank stated that CBI is not investigating any further for the Rs 950 Crore loan given in favor of the Kingfisher Airlines. Instead, the probe is been sanctioned against the lender.
When the recovery process was initiated, the group of banks led by SBI sold some property owned by KFA, which included shares of United Spirits Ltd, Mallya’s Goa Villa, Kingfisher House in Mumbai and some other particulars in February 2013. The cost of this property is estimated to be around Rs 4,000 Crore.