City Union Bank marks SpiceJet SMA-1, recalls Rs 100-crore overdraft
Tamil Nadu-based City Union Bank has marked the account of low-cost carrier SpiceJet as special mention account-1 (SMA-1), while deciding to withdraw the Rs 100 crore bank overdraft facility extended to the airline.
Lenders declare an account SMA-1 when interest or principals on loans are overdue for between 31 and 60 days.
A SpiceJet spokesperson said, “The Rs 100 crore facility is fully secured and backed by a Rs 100 crore fixed deposit. There has never been a default in service of this facility.”
The move by City Union Bank moves follows SpiceJet’s ongoing court case over a potential liquidation for non-payment of dues to Credit Suisse, and on account that the fixed deposit backing the Rs 100 crore facility was provisionally attached by the Enforcement Directorate in 2015.
