Still fresh from the Kingfisher Airlines experience, bankers are not taking in the civil aviation ministry’s nudge to give troubled SpiceJet working capital loans of up to Rs 600 crore to enable the payment of bills.
Bankers, The Indian Express spoke to, do not see a rationale for extending credit and see high risks.
“Since the money required is for payment to be made to oil companies and airport authorities for fuel and airport charges, I do not see a rationale behind bank’s providing a loan for payment to be made to them. The government can instead ask the oil companies and the authorities to extend the grace to the airline,” said the executive director official with a public sector bank on conditions of anonymity.
He, however, added that banks have not yet received a formal request for the loan.
The official also said that the Kingfisher experience has not been very good and there is apprehension among banks to offer loan to a beleaguered airline.
A senior official with another bank also raised concerns on the government’s point that the loan will be repaid in eight weeks after the airline secures a long-term investment. “What is the guarantee that the airline will get the investment in eight weeks and will repay the loan?” he said.