Central Bank hopes Kingfisher account will become regular

BL : 9th Nov 2012

NEW DELHI, NOV 8: 2012

Central Bank of India is hopeful of Kingfisher Airlines turning into a regular account for the bank.

The issue of recovery should arise only after December 31 when the licence of the private airline expires, R.K. Dubey, Executive Director, Central Bank of India, said here today.

Central Bank of India has an exposure of Rs 350 crore towards Kingfisher Airlines. This account is currently a non-performing asset for the bank.

Dubey said that it was for the 17-bank consortium to take a call on the future course of action against the ailing airline. No date has yet been decided on when the consortium will meet next, he said.

“We are hopeful. We live on hope. The Government has done its part by allowing FDI in domestic airlines. It is the turn of Mallya to bring in the funds. He could have some deal or divest stake in his portfolio of big companies where cash flow is better,’’’ Dubey said.

The 17-bank bank consortium may look at invoking personal or corporate guarantees only after December 31, he indicated.

“When hope dies, then naturally we have to do everything to recover monies. I alone won't be deciding what should be done.

The consortium has to decide that. We have only 5 per cent of the total Rs 7,000 crore exposure of banking system to the airline,’’ he said.

With Central Bank of India’s non-performing assets registering a sharp increase so far this fiscal, Dubey said that the bank has decided to focus on asset quality improvement and recovery during the next six months