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Bank of Baroda makes ₹500cr provision for Go First Loan
May 17, 2023
Bank of Baroda has set aside ₹500 crore against an advance to Go First, the airline that filed for voluntary insolvency earlier in May, apart from collateral for part of the loan, said Sanjiv Chadha, Managing Director and Chief Executive Officer (MD and CEO), Bank of Baroda.
“We have ₹1,000 crore collateral on tangible securities and ₹500 crore as provision in this quarter,” Chadha said after the state-owned lender announced its fourth-quarter results.
The bank lent ₹1,430 crore to the cash-strapped airline.
Earlier, Moneycontrol reported that banks are not looking at lending further to Go First before completion of the resolution process.
Go First’s insolvency petition was filed under Section 10 of the Insolvency and Bankruptcy Code, which allows a debtor to initiate proceedings against itself.
The airline owes lenders, including Bank of Baroda, Central Bank of India, Deutsche Bank and IDBI Bank, ₹6,521 crore, according to its petition.
The airline suspended flights and filed for voluntary insolvency in the National Company Law Tribunal in New Delhi on May 2. The NCLT admitted Go First’s petition on May 10, granting it bankruptcy protection and disallowing lessors from repossessing the carrier’s aircraft.
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