Crisis-laden Kingfisher Airlines got another blow Saturday as its principal lender, State Bank of India, categorically clarified that the bank could not release further funds to the cash-strapped private airline, even as the aviation controller Friday issued a notice to the air carrier asking it why its license should not be cancelled.

SBI chairman Pratip Chaudhuri said that the loans to the airline were fully provided and there was no room for more loans to the airline, CNN IBN reported. He added that 80 percent of airline’s funds has been freed by the Tax department.

Earlier, the SBI-led lenders consortium, which has a total exposure of about Rs. 70 billion in the airlines, had rejected the requests for fresh loans by the management.

The airline’s management Friday said that the 600 million rupees from a de-frozen account would not be sufficient to clear the backlogs of the salaries stretching to half a year.

The government and the Directorate General of Civil Aviation (DGCA) hardened their stance on the liquor baron Vijay Mallya-controlled airlines which has grounded its fleets since Monday.

The DGCA issued a notice to the beleaguered airlines why its permit to fly should not be cancelled under the provisions of Section 15(2) (b) of Schedule XI of the Aircraft Rules, 1937. The airline has 15-days to respond to the notice which seeks an explanation on the non-payment of employee salaries and the cancellation of its services.

If the airline failed to provide a satisfactory explanation and detailed plan, the license would be cancelled, the Economic Times reported quoting the DGCA officials.

Aviation Minister Ajit Singh made it clear that the airlines could not fly till it met the safety norms set by the DGCA and cleared the employees’ salary dues.

The employees stepped up the protests against the non-payment of salaries after the management failed to give any commitment on the payment of the pending and future salaries.  

The employees have been demanding the full settlement of their salary dues as a precondition to rejoin duties, forcing the airline to shut down the services. 

Kingfisher Airlines has a total debt burden of over $1.4 billion and has not posted any profit since its inception in 2005.