Mumbai: Kolkata-based United Bank of India has declared Vijay Mallya and three other directors of Kingfisher Airlines Ltd (KFA) wilful defaulters, said Deepak Narang, executive director of the bank. The other Kingfisher directors are A.K. Ganguly, Subhash Gupte and Ravi Nedungadi, Narang said.
The announcement comes after the Calcutta High directed Vijay Mallya to appear before the bank in person or through a company official to decide upon the wilful defaulter tag.
According to Reserve Bank of India (RBI) guidelines, once the wilful defaulter notice is issued, the borrower has 15 days to defend himself in front of the bank, before the lender declares him a wilful defaulter.
The Reserve Bank of India defines wilful default as a situation where an entity does not pay lenders even though it has the capacity to do so, or when it does not use funds for the purpose a loan was given.
Wilful defaulters are prohibited to borrow money from banks and cannot continue as a director in any company.
Kingfisher owes Rs.7,500 crore to a consortium of banks led by the State Bank of India.
