Chennai-based public sector lender, Indian Overseas Bank (IOB) which has exposure of Rs 120 crore towards cash-strapped Kingfisher Airlines today said the account may become non-performing asset (NPA) for the bank in the current quarter (October-December). While most Kingfisher lenders already marked the account as non-performing, it is still performing for the Chennai-based lender.
According to a senior official of the bank, if it becomes a NPA then the bank will have to provide 15-25 per cent of this Rs 120 crore as provisioning in this quarter. The exposure is in the form of working capital finance. At present, the lender is treating KFA account as standard asset though payments has become due.
There are 17 banks in the consortium of lenders to Kingfisher Airlines in which State Bank of India is the leader with an exposure of about Rs 1,500 crore.
As on September 30 the gross NPAs of the bank stood at Rs 5,930 crore as against Rs 3,898 crore a year ago while net NPAs stood at Rs 3,378 crore as against Rs 1,505 crore a year ago.
29/10/12 Neelasri Barman/Business Standard
