Banks can manage airline risks, says RBI’s Chakrabarty
24 Feb 2012
The Reserve Bank of India's senior-most deputy governor K C Chakrabarty today said the stress being faced by state-controlled banks due to their exposure to the aviation sector is a "manageable problem".
"Yes, aviation is a problem ... but at this stage we feel it is manageable," Chakrabarty told reporters on the sidelines of an event in Mumbai today.
All of India's airlines are under stress with rising costs and the general economic downturn.
Kingfisher Airlines is the worst hit of private carriers and is flying on a wing and a prayer.
National carrier Air India is in even worse economic shape, but being state-owned, it can depend on taxpayers' money to stay afloat - aviation minister admitted as much this week, saying the national airline could not be equated with private carriers.
Kingfisher alone has outstanding debt of around Rs13,000 crore spread across 18 banks. It has been making the wrong kind of headlines for at least a month now over cancelled flights and inability to pay its staff, apart from fuel and airport dues.
