The Reserve Bank has asked lenders to work out a special concessional package for the crisis-ridden aviation sector, reeling under financial debt burden of a staggering Rs60,000 crore.
In response, banks said they would look into the problems of airlines on case-by-case basis.
The Indian airline industry is facing mounting debts due to the economic downturn and resultant excess capacity, which still exists. Of late, the industry has been showing signs of recovery, which could gather pace if banks restructure loans.
According to an estimate, the cumulative debt of the airline industry stands at about Rs60,000 crore. As of March, 2010, Air India had about Rs 40,000 crore debt, while Kingfisher had a debt of about Rs6,000 crore.
"The RBI has allowed in the case of aviation sector a special concession. Banking industry could on a case-by-case basis, subject to the guidelines and parameters given by RBI, look to see how this industry could be helped by a rescheduling, restructuring...," State Bank of India chairman OP Bhatt told reporters on the sidelines of a banking conference here.
The RBI had sent a communication to the banks with regard to debt restructuring for airlines in the last week of August.
"We are sensitive to the requirement of the aviation sector and have communicated the same to the banks," RBI Deputy Governor Usha Thorat said.
While SBI's aggregate exposure to the aviation sector is about Rs3,000 crore, Bank of India's exposure is Rs 4,000 crore.
"Now the discussion is going on amongst the banks' consortium (how to go about on the recast)," Bhatt said.
Bank of India executive director M Narendra said, "RBI has given out some guidelines and we are currently studying and discussing those guidelines within the consortium."
Major carriers like Air India and Jet Airways want to restructure their debts and have been in talks with banks to get soft loans, instead of the ones with high-interest rates.
Last month, civil aviation minister Praful Patel had said, "The RBI has to come up with guidelines for the restructuring of debt of the aviation sector... In the case of Air India, it (debt restructuring) is very much active on the government's agenda."
The aviation sector is a major infrastructure sector and should be treated that way, he had said.
Comments