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Updated: October 8, 2012 23:26 IST

Kingfisher not a systemic risk, says Chakrabarty

PTI
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Reserve Bank of India Deputy Governor K. C. Chakrabarty
The Hindu Reserve Bank of India Deputy Governor K. C. Chakrabarty

The debt-laden Kingfisher Airlines, which owes 17 banks about Rs.7,000 crore, does not pose any systemic risk, Reserve Bank of India Deputy Governor K. C. Chakrabarty said on Monday.

When asked about the troubles at Kingfisher Airlines, Dr. Chakrabarty said that “it does not pose any systemic risk to the banking system“.

He was talking to reporters on the sidelines of an SME event organised by the Bombay Chamber of Commerce and Industry here.

The aviation regulator DGCA had recently served a show-cause notice on the company asking why its licence should not be revoked.

Within the lenders’ consortium, SBI has the single largest exposure with Rs.1,580 crore, followed by IDBI Bank (Rs.720 crore), Punjab National Bank (Rs.435 crore), Bank of India (Rs.575 crore), Bank of Baroda (Rs.530 crore), Central Bank of India (Rs.420 crore), UBI (Rs.350 crore), Corporation Bank (Rs.150 crore), and Federal Bank (Rs.80 crore which is not a loan but an en-cashed bank guarantee to BPCL).

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