NEW DELHI: Kingfisher's troubles show no sign of ending in a hurry. Finance minister Pranab Mukherjee on Tuesday saidState Bank of India (SBI) has no plan to provide fresh loans to the cash-strapped airline as of now. In addition, aviation minister Ajit Singh also made it clear that the government cannot force banks to continue lending to anyone after a meeting with PM Manmohan Singh to discuss the problems plaguing India's aviation industry.
"SBI has informed that currently there is no such plan to provide additional loan to Kingfisher," Mukherjee told Rajya Sabha in reply to a query over SBI's reported plans to bail out the airline by giving a fresh loan of Rs 1,500 crore. The crisis-ridden airline has a debt of Rs 7,057.08 crore.
Mukherjee said that SBI, which leads the consortium of lenders to Kingfisher, has informed that, as of February, the airline's account is "sub-standard" with eight public sector banks and "standard" with five public sector banks. "The consortium agreed to 'holding on operations', whereby a portion of the credits into the account are appropriated for reducing irregularities in the accounts of banks," he said.
Meanwhile, Ajit Singh met the PM on Tuesday to discuss the threats the Indian aviation sector faces. The biggest issue is of high jet fuel prices due to a high base price and even higher sales tax rates levied by states. The minister is learnt to have stressed on the need to rationalize jet fuel prices in his meeting with the PM. Singh warned airlines against compromising with safety due to their financial stress and warned of strict action if anyone was found guilty of the same.The management of Kingfisher, whose flights are getting disrupted from Monday as several unpaid pilots are staying away from work, is speaking to employees on the issue. "We are sorting it out. We are facing a serious handicap as our accounts are frozen. We are not asking for a bailout from the government but hope for help from the banking sector to de-freeze our accounts," Kingfisher chief Vijay Mallya told reporters outside Parliament, while terming the current disruption "planned cancellations".
In a related development, Jet Airways said that it has worked out a payment schedule with tax authorities for pending service tax dues. "An amount of Rs 35 crore has already been received by the service tax department, and the balance Rs 35 crore will be paid in full on March 15, 2012," an airline statement said.
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"SBI has informed that currently there is no such plan to provide additional loan to Kingfisher," Mukherjee told Rajya Sabha in reply to a query over SBI's reported plans to bail out the airline by giving a fresh loan of Rs 1,500 crore. The crisis-ridden airline has a debt of Rs 7,057.08 crore.
Mukherjee said that SBI, which leads the consortium of lenders to Kingfisher, has informed that, as of February, the airline's account is "sub-standard" with eight public sector banks and "standard" with five public sector banks. "The consortium agreed to 'holding on operations', whereby a portion of the credits into the account are appropriated for reducing irregularities in the accounts of banks," he said.
Meanwhile, Ajit Singh met the PM on Tuesday to discuss the threats the Indian aviation sector faces. The biggest issue is of high jet fuel prices due to a high base price and even higher sales tax rates levied by states. The minister is learnt to have stressed on the need to rationalize jet fuel prices in his meeting with the PM. Singh warned airlines against compromising with safety due to their financial stress and warned of strict action if anyone was found guilty of the same.The management of Kingfisher, whose flights are getting disrupted from Monday as several unpaid pilots are staying away from work, is speaking to employees on the issue. "We are sorting it out. We are facing a serious handicap as our accounts are frozen. We are not asking for a bailout from the government but hope for help from the banking sector to de-freeze our accounts," Kingfisher chief Vijay Mallya told reporters outside Parliament, while terming the current disruption "planned cancellations".
In a related development, Jet Airways said that it has worked out a payment schedule with tax authorities for pending service tax dues. "An amount of Rs 35 crore has already been received by the service tax department, and the balance Rs 35 crore will be paid in full on March 15, 2012," an airline statement said.
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