Kingfisher fails to pay interest dues to lenders

Bangalore: Kingfisher Airlines, which was supposed to pay at least its interest dues to lenders by November 30, has failed to do so rendering the account a potential non-performing asset (NPA) for banks.
The 90-day limit to pay at least the interest dues ended by the close of banking hours on Wednesday.
An account becomes an NPA if interest is not paid for one quarter. With system-driven NPA recognition in place, the account will turn an NPA automatically on the 91{+s}{+t} day. According to an official of a public sector bank, which is among the lending consortium, “since the airline did not service its interest dues on Wednesday”, the account would now become a non-performing asset for the lender banks if the company does not clear its interest dues by December 31, when banks close their profit and loss account for the third quarter.
However, lender banks will not be impacted much if the company pays the entire overdue amount before the end of the third quarter. “Converting any account which has become an NPA is possible if the company pays up the entire overdue amount,” pointed out a top official of another lender bank.
30/11/11 Business Line

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Categories: Kingfisher Dec 2011