Trouble for Air India; govt rejects debt recast plan

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Air India
Mumbai, Dec 28: The Finance Ministry of India has rejected the debt recast plan of ailing Air India stating that state run banks will have to take a huge hit, reported The Economics Times.

According to the debt restructuring plan, the banks will have to set aside about Rs 96 billion as provisions against a total loan outstanding of Rs 224.50 billion, said the report.

"Banks do not have the capacity to take such a huge sacrifice on their books," said Financial Services Secretary D.K. Mittal adding there were plans to work out a package where the risk allocation was "proper" and provision requirement "lower".

Meanwhile, the consortium has 26 banks which is led by the state-run State Bank of India, the largest bank in the country. IDBI and Bank of Baroda are the other banks in the consortium with exposure to the loss-making carrier.

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