Not a wilful defaulter, Kingfisher Airlines tells UCO Bank

Kingfisher Airlines has objected to being identified as a 'wilful defaulter' by state-run UCO Bank, which had sent a notice following non-repayment of a Rs 450 crore or Rs 4.50 billion loan by the grounded carrier.

"The airline has protested saying that it was not a 'wilful defaulter' as identified by the bank", a source in UCO Bank told PTI.

UCO Bank had sent a notice to the Vijay Mallya-led airline for not repaying a loan of Rs 450 crore which it took to meet working capital requirements with a corporate guarantee furnished by a group firm.

The bank had sent notices to both Kingfisher Airlines (KFA) and the guarantor.

About UCO Bank's future course of action in this regard, the source said that the bank would examine the arguments forwarded by the airline and would then send a reply.

"Another notice will follow after sending the reply to KFA", the source said.

According to RBI guidelines, a wilful defaulter tag would be given if it is found that a loan taken is diverted for some other use rather than for which it was availed, as well as the default is made in spite of having the ability to repay it.

Another city-based lender United Bank of India (UBI) had declared KFA as a `wilful defaulter', but the decision was challenged by the airline in the Calcutta High Court.