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“We are examining the possibility,” Arun Kaul, chairman and managing director, told reporters on the sidelines of an event organised by CII here on Friday. UCO Bank is one of the 17 lenders to now grounded Kingfisher Airlines. The airline had borrowed around Rs 6,500 crore from the consortium of lenders, led by the State Bank of India. UCO Bank’s loan exposure to KFA is estimated at over Rs 300 crore.
United Bank of India (UBI) has already declared Kingfisher Airlines a wilful defaulter, while SBI has served it with a show cause notice seeking explanation as to why it should not be named a wilful defaulter.
The airline company has contested the moves.
A borrower is declared a wilful defaulter if he/she does not repay the dues despite having the capacity to do so. Also, a borrower is classified a wilful defaulter if he/she does not repay the loan and has siphoned off the funds or used the money for purpose other than the one for which the loan was availed. Once an entity or an individual is declared a wilful defaulter, they are debarred from availing finance from banks and financial institutions. Lenders can also initiate the legal proceedings against wilful defaulters.
Separately, Kaul said the bank is yet to hear from RBI on the findings of the recently conducted forensic audit conducted at UCO Bank.
