Air India ties up with PNB, IndusInd for loan

Air India has tied up with public sector lender Punjab National Bank and private lender IndusInd to secure loans to the tune of over 3,000 crore (US$451m) for meeting working capital requirements. The airline expects the two banks to disburse the amount by next week, a source close to the development said. Earlier this month, the disinvestment-bound Air India had floated tenders for availing government guarantee backed INR short-term loans totalling up to 3,250 crore in the first phase to meet its urgent working capital. Banks were asked to submit their financial bids by September 19, indicating the amount of government-guaranteed short-term loans they were willing to offer. “Punjab National Bank and IndusInd bank have won the mandate to lend us loans worth 3,250 crore. They are expected to disburse the amount next week,” the source said. He said the funding will be used for repayment of dues to the airport operators, oil companies and other vendors.<br/>