The shares of private aviation firm, Kingfisher Airlines has recorded a fall of 11 per cent in morning trade following an announcement by the State Bank of India, which is the leading a consortium for the lenders, declaring its investment in the airline as a non-performing asset for the bank.

On the Bombay Stock Exchange, the stock fell by 10.75 per cent to an early low of Rs 18.25, while its shares on the National Stock Exchange touched an early low of Rs 18.15, down 11.24 per cent from the previous day’s close.

SBI Chairman Pratip Chaudhuri said, "Kingfisher is a non-performing asset for us. They are in default."

The State Bank has an exposure of Rs 1,457.78 crore in airline struggling with difficult financial situation. Kingfisher’s is facing a financial crisis and huge leans amount to as much as Rs 6,000 crore.

An audit by the Directorate General of Civil Aviation (DGCA) has shown that the financial crisis is affecting air safety. There are also indications that the regulators might consider taking away licences from one private sector and another public sector airline.

According to the audit, airlines are now saddled with Rs 1,06,000 crore of debts and accumulated losses of more than Rs 30,000 crore.