4:35 am - Friday March 29, 2024

UCO Bank examining ways to declare Kingfisher Airlines wilful defaulter

566 Viewed Gautam Comments Off on UCO Bank examining ways to declare Kingfisher Airlines wilful defaulter

State-run lender UCO Bank is examining its options on how to declare Kingfisher Airlines a willful defaulter, chairman and managing director Arun Kaul said on Friday.

“We are examining the possibility,” Kaul said on the sidelines of an event organised by the Confederation of Indian Industry (CII) in Kolkata today.

UCO Bank, which has an exposure of about Rs 300 crore to the airline, is one of 17 lenders to whom Kingfisher Airlines owes money. The now-grounded airline borrowed over Rs 6,500 crore from various lenders.

Kaul said the bank is yet to hear from RBI on the findings of a recent forensic audit of the bank that the regulator conducted to examine some of the loan accounts.

United Bank of India (UBI) has already declared Kingfisher Airlines a willful defaulter while State Bank of India (SBI) has sent it a show-cause notice asking why it should not be named a willful defaulter. The airline company has contested the moves.
A wilful default happens when a borrower does not repay his dues despite having the capacity. A borrower is also classified as a wilful defaulter if he does not repay and has siphoned off the funds or used the money for some purpose other than the one for which the loan was availed. Once an entity or an individual is declared as a wilful defaulter, they are debarred from availing finance from banks and financial institutions. Lenders can also initiate the legal process against wilful defaulters.

Earlier this month, Reserve Bank of India governor Raghuram Rajan said the wilful defaulter tag was a “powerful weapon” in the hands of lenders.

“The wilful defaulter tag is a powerful weapon in the hands of creditors for resolving distressed assets. It shuts out access to credit within the Indian financial system for a borrower,”

Don't miss the stories followIndiaVision India News & Information and let's be smart!
Loading...
0/5 - 0
You need login to vote.
Filed in

Rupee erases all gains, trades flat at 60.84 per dollar

Biocon stock zooms after Silver Leaf Oak buys 10% stake in Syngene for Rs 380 cr

Related posts