Aviation cos avoid a 'cash' crash-landing

New Delhi: The Reserve Bank of India (RBI) has allowed banks to restructure the debt of the cash-strapped aviation sector to help the beleaguered industry come out of financial turmoil, sources said.
The RBI has sent a communication to the banks with regard to debt restructuring for airlines, banking sources said.
"The RBI has allowed banks to restructure loans. We will look at the viability of aviation companies," a senior official of Bank of India said.
Bank of India has an exposure of around Rs 4,000 crore to 4-5 companies in the aviation sector.
Interestingly, debt restructuring of the aviation sector comes at a time when non-performing assets of public sector banks rose due to loan recasts of certain sectors like textiles, which faced a tough time due to the global financial meltdown.
Recently, Financial Services Secretary R Gopalan had said the gross NPAs of banks are likely to rise this fiscal from 2.5 per cent of loans in 2009-10 due to restructured debts.
03/09/10 ExpressIndia

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Categories: Indian Aviation- In General Sep 2010