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The State Bank of India said Mr Vijay Mallya-promoted Kingfisher Airlines has turned a non-performing asset (NPA).
“Kingfisher is an NPA for us. They are in default,” Mr Pratip Chaudhuri, SBI Chairman, told reporters here on Thursday.
SBI is the lead bank in the consortium that has funded this private airline. The country's largest commercial bank has an exposure of Rs 1,458 crore to Kingfisher Airlines, which is in a weak financial position and struggling to service its loans.
The other banks with significant exposure to Kingfisher Airlines are IDBI Bank at Rs 727 crore, Punjab National Bank (Rs 710 crore), Bank of India (Rs 575 crore) and Bank of Baroda (Rs 537 crore).
Dues
Kingfisher Airlines has been facing rough weather from tax authorities in recent months for non-payment of service tax to the Government as well as for non-deposit of tax deducted at source (TDS) from employees' salaries.
The Income-Tax Department has already initiated proceedings for the financial year 2010-11 to crystallise the default amount, levy interest on delayed payment and take further statutory action. Preliminary examination by the Department put the liability for 2010-11 at Rs 53.82 crore. For 2011-12, the liability (non-deposit of salary TDS to the exchequer) has been estimated at Rs 100 crore.
Out of the total amount of Rs 153.82 crore for these two years, the Department has collected Rs 21.04 crore. Kingfisher Airlines has filed a commitment letter and undertaken to pay the balance TDS liabilities by the end of the current financial year.
DGCA raps airlines
The Directorate General of Civil Aviation (DGCA) has asked Kingfisher and Alliance Air to submit their recovery plans with firm timelines next week. But it has ruled out shutting down any airline.
It has also rapped all Indian air carriers over the issue of neglecting safety due to financial constraints and made it clear on Thursday no airline would be allowed to take a “short-cut” on safety.
The airlines have been asked to sort out the safety issues in a time-bound manner.
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