The 13-bank consortium that owns 23% in Kingfisher Airlines is yet to take a call on pumping more money into the cash-starved carrier - India's second largest in terms of market share - promoted by UB Group chairman Vijay Mallya.
But the banks may agree on a fresh package only if Mallya agrees to invest his own money in the airline, said a state-owned bank chief.
The consortium, led by the State Bank of India, has financed more than Rs 7,000 crore.
Mallya, however, tweeted on Saturday: "Kingfisher never asked for a bailout."
A senior executive at ICICI Bank, a consortium member, said that it was averse to providing additional support to the airline, since Mallya had invested in various sporting activities even at a time when things were not going right for the airline.
"Although the airline has not sought any debt restructuring or a bailout package, it has asked the consortium to provide more working capital. The lenders would be required to find a solution to this," a chairman of a state-owned bank told HT.
An auditor with one of the public sector banks said such requests should not be encouraged and no concession should be given to Kingfisher, as it could send a wrong signal to borrowers at a time when most banks are witnessing a surge in the level of bad assets.
Last week, global rating agency Moody's downgraded the outlook for the country's banking industry from "stable" to "negative" saying that the quality of asset could deteriorate in the next 18 months due to rising interest rates.
In October, Moody's had also downgraded its rating for SBI.
The ratings firm blamed the pull-down to a shortage of capital in SBI to cushion bad loans or contingencies and "weakening asset quality" - implying loans that do not yield interest.
The consortium that held around 5% stake in the airline till December last year, now holds 23.37%, thanks to last year's debt restructuring package under which about Rs 7,651 crore was converted into equity at Rs 64.48 a share.
Meanwhile, bank unions have threatened to go on an indefinite strike if any concession is given to the airline.
"We must deal strongly with such situations so that it is not repeated, if such big corporate borrowers can get lease of life then why don't extend the same benefits to retail lenders who have limited means," CH Venkatachalam, general secretary, All India Bank Employees Association, said.