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Kolkata-based UCO Bank has sent a notice to Vijay Mallya-owned Kingfisher Airlines (KFA), “identifying” the company as a wilful defaulter.
The grounded airline was earlier declared a wilful defaulter by United Bank of India.
According to a senior UCO official, KFA has been asked to present its case before the bank’s grievance redress committee. On failing to settle the issue, the company will be declared a wilful defaulter.
“We have identified KFA as a wilful defaulter. Notices have been sent to it,” the bank official told Business Line .
According to Reserve Bank of India’s (RBI) guidelines a wilful defaulter is one who has the capacity to repay but chooses not to do so. The money borrowed is being used for purposes other than for which it was taken.
UCO Bank is amongst the consortium of 17 banks that have a total exposure of ₹6,500 crore in KFA. While the consortium is led by SBI, UCO on its part is said to have lent ₹300 crore.
Wilful DefaultOn September 1, United Bank declared KFA, Mallya and three other directors wilful defaulters for non-payment of dues.
However, Kingfisher had, in September, secured a stay from the Calcutta High Court against UBI’s decision.
According to UBI sources, the stay is “interim” in nature. The bank has been asked to submit an affidavit to the Court by November 3. The case will come up for hearing on November 10.
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