Equity infusion will be essential for the survival of the aviation industry: Bank chiefs tell RBI

Mumbai: CEOs of commercial banks have informed the Reserve Bank of India (RBI) that promoters need to bring in equity and there is a need for structural changes for the survival of the aviation industry. Bank chiefs conveyed this to the RBI governor, D Subbaroa, during the quarterly monetary policy meeting held in Mumbai today.
The governor Subbaroa made esquires regarding banks lending to aviation and power sector. The RBI's concerns stems from huge losses incurred by some airlines companies and state electricity boards and also the huge exposure banks have in these two sectors. It is estimate that SEBs have over Rs 140,000 crore losses in 2011, up from Rs 27,000 crore a year ago. In aviation sector Air India alone has posted a cumulative loss of Rs 13300 crore since 2007 while Kingfisher and Jet Airways are also making losses.
24/01/12 Sangita Mehta/Economic Times

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Categories: Indian Aviation- In General Jan 2012