Neither RBI nor the banks have appreciated the significance of financing knowledge capital
With the loans to Kingfisher Airlines (KFA) turning into a non-performing asset, the Reserve Bank of India (RBI) has asked banks not to treat “Kingfisher brand", an intangible asset, as collateral. The issue is not that banks will now have to treat their exposure to KFA (at least that part which was given on the back of its brand, valued by a consulting firm at more than ₹ 4,000 crore in 2010) as unsecured, thereby increasing their provisioning requirement from 15% to 25% of the loan value.
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