The Reserve Bank of India is set to meet banks to discuss the rising non-performing assets (NPA), according to KC Chakrabarty, deputy Governor of RBI. The RBI meeting would be held either on February 29 or March 1.
“This meeting is to understand the problems on the NPA front and enhance communication between banks and RBI,” Chakrabarty said.
RBI will come out with corrective measures on NPAs if needed, he added.
The banking sector has seen a massive rise in non-performing assets on account of corporate debt restructuring in sectors like Aviation and power.
In its Q3 results, State Bank of India posted a 2.2 per cent rise in net NPA's and reported a massive 85 per cent rise in provisioning against non-performing assets at Rs 2,407.42 crore. Kingfisher and Air India are the two biggest non-performing assets for the country's top lender.
However, KC Chakrabarty tried to play down the problem on NPAs.
“There is a problem in the aviation sector but it is manageable,” Chakrabarty said.
Several newspapers reported on Tuesday that SBI would throw a lifeline to Kingfisher, which is majority-owned by liquor baron Vijay Mallya, giving figures ranging from Rs 200 crore to Rs 1,650 crore. SBI bank is the single largest PSB lender to the carrier.
But, SBI clarified on Wednesday that they had not extended further loans to debt-crippled Kingfisher Airlines denying reports that the state-owned creditor was close to offering a lifeline.
Further, Diwakar Gupta, chief financial officer of SBI told NDTV Profit in an exclusive interview that converting debt into equity of Kingfisher Airlines was not a favoured route.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
