Bank of India sanctions Rs 1500 crore loan to Air India

New Delhi : Bank of India has sanctioned a much-needed loan of Rs 1500 crores to debt-laden Air India, an airline source said.

This is the second time Air India has received a loan from the private sector bank within last few months.

Air India has been battling ways to reduce its debt by selling some of non-core assets and also expanding operations.

With a view to meet urgent working capital, Air India had issued a tender for the amount last month.

A tender was issued by the carrier on October 18 in which it had sought government guarantee-backed short-term loans totalling up to Rs 1,500 crore to meet "its urgent working capital requirements". 

Prior to this, Air India had received a loan of Rs 3,250 crore from Indusland Bank and Punjab National Bank.

Air India is surviving on taxpayers' money under the bailout package extended by the previous UPA government in 2012.