Monday, October 27, 2014

UCO Bank identifies Kingfisher Airlines as wilful defaulter

Kolkata: UCO Bank has joined the growing list of lenders to have identified grounded Kingfisher Airlines as a wilful defaulter for non-payment of dues. However, the bank is yet to formally declare the company a wilful defaulter.

“We have identified Kingfisher Airlines and its corporate guarantors as wilful defaulters. We are in the process of sending them a notice,” a senior executive of the bank told Business Standard, requesting anonymity.

The state-run bank has lent over Rs 300 crore to Kingfisher Airlines. The airline has borrowed about Rs 6,500 crore from a consortium of 17 banks. According to the Reserve Bank of India (RBI)’s guidelines, a wilful default is an entity that has the capacity to repay its dues but chooses not to do so, or uses the borrowed money for purposes other than those for which a loan was availed of.

Typically, banks have an internal committee, which examines cases of wilful defaults. The credit monitoring or recovery departments submit their reports on borrowers deemed to have defaulted willfully to this committee.
28/10/14 Business Standard
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