The Reserve Bank is not opposed to the State Bank of India extending support to the cash-strapped Kingfisher Airlines, its Deputy Governor K.C. Chakrabarty said on Wednesday.
“Absolutely not,” he told reporters when asked to comment on reports suggesting that SBI has agreed to pump more money into the airline.
RBI does not oppose “professional decision” of the bank, Mr. Chakrbarty said.
He further said if the bank felt that by giving a little more money, it could get back the entire money, “that’s what they will do”.
“Banks are commercial entities. If they feel by supporting a unit, if the unit can survive, they must explore that possibility,” Mr. Chakrabarty said. “Banks are risk-taking entities”.
Kingfisher, which has an outstanding debt of over Rs 7,057.08 crore (according to the latest figures), has requested a consortium of lenders, led by SBI, for a working capital support of Rs 200-300 crore.
The airlines, whose bank accounts have been frozen for non-payment of taxes, has cancelled a number of flights in the past few days following which the aviation regulator DGCA had on Tuesday set a 24-hour deadline for it to come up with a “realistic” flight schedule.
Keywords: Kingfisher Airlines crisis