RBI may intervene to recast aviation sector’s debt

New Delhi: The Reserve Bank of India is working on a debt repayment program which would prove a breather for the aviation industry reeling under financial stress, say bankers.
“There was some discussion (on debt restructuring). The RBI has said they will come out with something within a week or so,” SBI Chairman O.P. Bhatt told PTI.
“Aviation sector is on an uptick. It requires to come out of stress. However, RBI mandate is necessary,” he said.
SBI has Rs. 3,500 crore exposure to the aviation sector, which comprises 0.24 per cent of total advances, he said.
According to an estimate, the debt of airline industry is about Rs. 60,000 crore. As on March, 2010, Air India had about Rs. 40,000 crore debt while Kingfisher had a debt of about Rs. 6,000 crore.
Aviation sector is under stress but RBI is working on debt restructuring and it should come out with guidelines in the next few weeks, Indian Bank Chairman and Managing Director T.M. Bhasin said.
As per the Bank of Baroda Chairman and Managing Director M.D. Mallya, the bank has exposure of about Rs. 3,000 crore.
Banks are awaiting guideline from the RBI on debt recast.
19/08/10 PTI/The Hindu

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Categories: Indian Aviation- In General Aug 2010