IDBI sanctioned murky loans to Kingfisher ignoring poor ratings
New Delhi: Public sector bank IDBI had sanctioned loan over Rs 900 crore to the cash strapped Kingfisher Airlines ignoring its own internal assessment report which revealed that the aviation company was in deep trouble.
The assessment report prepared in 2009 revealed that Kingfisher Airlines was deep in red along with Mallaya’s own personal assets, reported a private news channel.
The bank’s assessment report was commissioned in November 2009 to asses Kingfisher’s financial viability for the purpose of considering the sanction of a loan of Rs 150 crore for six months to the carrier.
As per the logical deduction of the report, Kingfisher should not have secured the loan when the sanctioning bank in its own internal assessment report found the airline to be in a financial mess. Despite the revelation the loan was approved by the bank which raises a few pertinent questions regarding the bank’s decision.
On a similar note, Kingfisher’s proposal for Rs 750 crore loan also received poor ratings as a report concluded higher instances of debt and less guarantee for the repayment of loans.
The modus operandi of the public sector bank which instead of taking any action dispensed favour to the airline in form of hefty loans has come to the fore when other banks and major stake holders are yet to chart a course to help Kingfisher out of the choppy waters.