UCO Bank identifies Kingfisher Airlines as 'wilful defaulter'

City-based UCO Bank on Monday said it has "identified" Vijay Mallya-owned Kingfisher Airlines (KFA) as a "wilful defaulter" and will be sending a notice to the defunct carrier.

"We have identified KFA as a wilful defaulter. We are in the process of sending a notice to the company in this regard", a source in the bank told PTI.

Other banks like State Bank of India and Punjab National Bank are also mulling this route. United Bank of India has already declared KFA a 'wilful defaulter' for defaulting a loan of Rs 350 crore  (Rs 3.50 billion).

Beside KFA, UCO Bank will also send a notice to the company which had furnished a corporate guarantee for availing a loan of around Rs 450 crore or Rs 4.50 billion, the source said.

As per 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.