Mumbai: Kerala-based Federal Bank has classified its Rs 90-crore exposure to debt-ridden Kingfisher Airlines as non-performing loan.
"The guarantee has devolved and since the account has not been serviced for 90 days, the bank has classified the exposure as bad loan," the bank's executive director Abraham Chacko said.
"We are a part of a consortium and would await banks to decide on the terms of restructuring," he said. Recently, the old private sector bank had restructured loans of about 300 crore lent to Air India.
Banks have a total exposure of about Rs 7,000 crore to Kingfisher, of which about Rs 4,000 crore is in the form of term loans. Lenders such as State Bank of India, ICICI Bank and IDBI Bank have already faced mark-to-market losses to the tune of about Rs 2,800 crore after the first debt recast, in which a part of their debt to the airline was converted to equity, as KFA stock price has consistently declined since then.
Federal Bank's restructured assets at the end of December 2011 stood at Rs 1,400 crore.
07/03/12 Economic Times
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