Mumbai: The finance ministry has opposed the plan to recast Air India's debts on the ground that it will force state-owned banks to take a big hit.
Banks will be required to set aside 9,619 crore as provisions against a total loan outstanding of 22,450 crore as per the debt restructuring package prepared by SBI Capital Markets, the investment banking arm of SBI.
"We are in the process of putting in place a plan where the risk allocation is proper and provision requirement is lower. Banks do not have the capacity to take such a huge sacrifice on their books," Financial Services Secretary DK Mittal told ET. He said the provisioning requirement would be significantly lower in the new package, but did not say how much. The finance ministry, grappling with a sizeable fiscal deficit, has advised banks not to depend on the government for capital.
28/12/11 Sangita Mehta/Economic Times
To Read the News in full at Source, Click the Headline
0 comments:
Post a Comment