Aviation NPAs a manageable problem, says Chakrabarty

Declines making account-specific comments

PTI | February 24, 2012



Reserve Bank deputy governor K C Chakrabarty on Friday 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.

Comments

 

Other News

Income Tax dept holds Ghatkopar Outreach on new IT Act

The Income Tax Department organised an outreach programme in Ghatkopar, Mumbai, to raise awareness about the key features of the Income Tax Act, 2025, effective April 1, 2026. The initiative is part of a nationwide effort to promote taxpayer awareness, simplify compliance, and strengthen a transparent, eff

Making AI work where governance is closest to people

India’s next governance leap may not solely come from digitisation. It will come from making public systems more intelligent, more adaptive, and more responsive to the dynamics at the grassroots. That opportunity is especially significant at the panchayat level, where governance is not an abstract po

Borrowing troubles: How small loans are quietly trapping youth

A silent crisis is playing out in the pocket of young India, not in stock markets or government treasuries, but in smartphones of college students and first-jobbers who clicked on the Apply Now button without reading the small print.  A decade ago, to take a loan, you had to do some paperwor

A 19th-century pilgrim’s progress

The Travels of a Sadhu in the Himalayas By Jaladhar Sen (Translated by Somdatta Mandal) Speaking Tiger Books, 259 pages, ₹499.00  

India faces critical shortage of skin donors amid rising burn cases

India reports nearly 70 lakh burn injury cases every year, resulting in approximately 1.4 lakh deaths annually. Experts estimate that up to 50% of these lives could be saved with adequate access to skin donations.   A significant concern is that around 70% of burn victims fall wi

Not just politics, let`s discuss policies too

Why public policy matters Most days, India`s loudest debates stop at the ballot box. We can name every major leader and recall every campaign slogan. Still, far fewer of us can explain why a widow`s pension is delayed or how a government school`s budget is actually approved. That


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter