MUMBAI :State-owned Bank of Baroda has set aside ₹500 crore as provisions to cover any potential hit if loans to Go Airlines (India) Ltd turn sour, a senior executive said on Tuesday.
MUMBAI :State-owned Bank of Baroda has set aside ₹500 crore as provisions to cover any potential hit if loans to Go Airlines (India) Ltd turn sour, a senior executive said on Tuesday.
Sanjiv Chadha, chief executive, Bank of Baroda said that Go Airlines has indicated that the bank’s exposure is about ₹1,300 crore, without accounting for the exposure guaranteed by the government.
Sanjiv Chadha, chief executive, Bank of Baroda said that Go Airlines has indicated that the bank’s exposure is about ₹1,300 crore, without accounting for the exposure guaranteed by the government.
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“Of this, about a ₹1,000 crore is collateralized by way of tangible security and by way of corporate guarantees. We have in this quarter gone ahead and made a provision of ₹500 crore for this account,” Chadha told reporters.
Chadha said that any potential downside has been fully taken into account and the bank is completely protected as far as the account is concerned.
“We have always been proactive in taking any provisioning which is required and that is why our credit costs have come down. Normally, we do not comment on specific accounts, but in this case, we will make an exception because the company has made a filing and the figures are public knowledge,” Chadha said.
The principal bench of the National Company Law Tribunal (NCLT) admitted Go Airlines’ insolvency application on 10 May. Earlier, the airline had announced its decision to approach the insolvency tribunal, terming it a result of the “ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines, LLC”. This, it said, has resulted in the airline having to ground 25 aircraft as of 1 May.
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