Mumbai: Reserve Bank of India (RBI) 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.
Aviation companies, led by 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 Rs13,000 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 devbt around Rs18,000 crore out of which Rs7,400 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 24 January policy announcement, will be held either on 29 February or 1 March.
“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.