Kingfisher airlines is facing a series of financial issues with profits dipping even in the recently closed quarter. The continuous dipping has affected the airlines much like many flights have been cancelled and staff salaries are also due as per sources. The dithering performance even after restructuring the loans, have made the banks propose more stringent norms. Another bail-out from the banks is proposed and adherence to the pre-set norms might hasten the operation. The State Bank of India asked the airliner to reverse the amount paid to its promoters as it was their own business. And payments to the promoters on these grounds were a regulatory violation.

The premier business media has quoted that, "Mallya has agreed that they would not exercise the option," said a banker requesting anonymity. But it is not clear yet whether the past transactions are being reversed. The carrier, which is facing liquidity crunch, entered into an agreement with Mallya and his holding company, UB Holdings, where the airline had paid Rs 49.48 Cr and Rs 58 Cr, respectively, against the guarantees they had provided for the Rs 7,000-crore loans from banks.

Amid this controversy, SBI Capital Markets, the mandated firm to restructure its loans, on Friday made a fresh case for Kingfisher Airlines on grounds that initiatives taken by the government makes it a viable proposition. SBI Caps has asked banks to provide Rs 800-1,000 Cr of fresh loans for the airline's revival. Banks are considering this proposal after internal discussions. (With inputs from internet: AarKay)