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.