The Reserve Bank Deputy Governor, Mr K. C. Chakrabarty, today said the stress being faced by banks from their exposures to the aviation sector is a “manageable problem.”
“Yes, aviation is a problem...a problem, at this stage we feel is manageable,” Mr Chakrabarty told presspersons on the sidelines of an event here this morning.
Aviation companies led by the flamboyant Vijay Mallya-promoted Kingfisher Airlines have been witnessing stress and it has also impacted their debt servicing, with some accounts turning non-performing assets (NPAs).
Kingfisher alone has an outstanding debt of around Rs 13,000 crore spread across 18 banks and with no fresh lending in sight, faces acute problems on the working capital front. It has had to cancel its flights as a result of the problem over the past one week.
The State-owned Air India is the second problem account in the sector, but lenders last week announced a restructuring under which Rs 7,400 crore of debt will be converted into non-convertible debentures (NCDs) with a Government guarantee.
Mr Chakrabarty declined to make account-specific comments but said the RBI is keeping an eye on developments.
The senior-most Deputy Governor at Mint Road also said the specially convened meeting on NPAs announced after the January 24 policy announcement would be held either on February 29 or March 1.
“We are going to meet them shortly (to) understand what is happening on the NPA front...understand the situation,” Mr Chakrabarty said.
Apart from aviation, stress is also being observed from some State Electricity Boards and certain telecom companies, amongst others, which led the RBI to call the meeting on NPAs with top banks.
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