The 17-bank consortium, which has an aggregate exposure of about Rs 7,000 crore to Kingfisher Airlines, will soon meet to decide the future course of action, a top banker has said.
“Now that DGCA action is before us, we (bankers) will meet and take a call,’’ K.R. Kamath, Chairman and Managing Director of Punjab National Bank, told reporters on the sidelines of an event here on Tuesday.
The Directorate General of Civil Aviation (DGCA) had a few days ago suspended the licence of ailing Kingfisher Airlines.
“All the bankers will sit together and take a decision. The State Bank of India, which is the consortium leader, has to convene the meeting,” Kamath said.
After SBI, Punjab National Bank has the next highest exposure to Kingfisher Airlines in the consortium.
Bankers are quite hopeful that the employee issues will soon get resolved. They want to take up recovery proceedings as the last resort.
With Kingfisher Airlines grounded, the brand value of the airline has also taken a hit.
It is unlikely that any sizeable amount would get salvaged if bankers were to initiate recovery action today, sources in the banking industry said.
Kingfisher Airlines brand was the main collateral that was used for availing working capital funding for the private carrier.