Reserve Bank of India (RBI) deputy governor K C Chakrabarty today said the stress being faced by the 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,” Chakrabarty told reporters on the sidelines of an event this here 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 outstanding debt of around Rs 13,000 crore spread across 18 banks and with no fresh lending in sight,faces acute problem on working capital. It has had to cancel its flights as a result of the problem since the past one week or so.
The state-owned Air India is the second problem account in the sector but lenders last week announced a restructuring of its around Rs 18,000 crore out of which Rs 7,400 crore will be converted into non-convertible debentures (NCDs) with a government guarantee.
Chakrabarty declined to make account-specific comments but said the RBI is keeping an eye on the developments.
The senior most deputy governor at the Mint Road also said the specially convened meeting on NPAs announced after the January 24 policy announcement,will 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,” 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.