Kingfisher Airlines, not IDBI Bank, under CBI scanner

Tags: News
State-owned IDBI Bank today said it is not being probed by the CBI over the Rs 950-crore loan extended to now defunct Kingfisher Airlines but investigation was being carried out against the borrower.

"The preliminary enquiry initiated by the CBI a few months ago is against the borrower, Kingfisher Airlines Ltd (KAL) and not against IDBI Bank," the bank said in a statement.

The bank has been providing all the information and documents sought by the CBI in the matter and will continue to extend full assistance to the investigating agency in the said enquiry, IDBI Bank said.

IDBI Bank is one of the 16 consortium lenders headed by State Bank of India to KAL, promoted by liquor baron Vijay Mallya.

KAL defaulted in its payment obligations to the banks and they have jointly taken several recovery actions against the company and its promoter.

Yesterday, IDBI Bank Chairman and Managing Director M S Raghavan said the loan was given after due diligence when the airline was doing well.

Some particulars regarding the matter have already been submitted to the CBI and more information will be given in a couple of days, he said.

Meanwhile, some banks have initiated the process of declaring debt-ridden Kingfisher Airlines as wilful defaulter.

Once declared wilful defaulter, criminal proceedings can be initiated against promoters and directors of the company.

Besides, they would not be allowed to raise fresh funds from banks and set up new ventures for five years.

As per RBI guidelines, banks have to prove that the borrower diverted the funds taken and are not paying up despite having the ability to pay.

The consortium of banks has an outstanding debt of about Rs 4,022 crore from the now-grounded carrier.

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