The CBI has instituted a preliminary inquiry into the 950 crore rupee loan given by IDBI Bank to Kingfisher Airlines allegedly ignoring the company's negative credit rating and networth. CBI sources said, the Bank had failed to provide convincing answers on reasons to extent the loan to the crisis-written company.Sources said, there was no need for the Bank to take this exposure outside the consortium when already other loans were getting stressed.

The sources said senior officials of the management of Kingfisher Airlines, part of the UB group promoted by Vijay Mallya, and IDBI Bank will be examined for explaining the reasons for extending the loan to the airline, ignoring its own internal report which has warned against such a move. The debt-laden airlines has stopped operations since October, 2012.