Banks recasting Rs 1,300 cr loan to Goa mining sector

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'RBI at a recent meeting of the empowered committee in Goa had told the banks that they had no objections for restructuring the debt of the mining industry.'  (Reuters) 'RBI at a recent meeting of the empowered committee in Goa had told the banks that they had no objections for restructuring the debt of the mining industry.' (Reuters)
SummaryCanara Bank, which has an exposure of Rs 37 crore, has already begun recasting the loan.

Following the go-ahead by the Reserve Bank, banks have begun restructuring the loans worth around Rs 1,300 crore given to iron ore miners and other stakeholders such as truckers and shipping lines.

The Goa Chamber of Commerce and Industry (GCCI), which has intermediated the efforts to get the loans restructured, today said the banks have already begun the debt restructuring process.

Canara Bank, which has an exposure of Rs 37 crore, has already begun recasting the loan, while Corporation Bank is also in the process of loan recast, the chamber said. "The RBI during a recent meeting of the empowered committee in Goa had told the banks that they had no objections for restructuring the debt of the mining industry if they are based on the prescribed guidelines," GCCI president Manguirish Pai Raikar said.

According to a rough estimate, banks have around Rs 1,300 crore exposure to the troubled industry. Loan servicing had been hit after mining came to a standstill in the state.

There are 22,000 trucks and 400-odd ships in the state transporting ore from different parts of Goa to the ports.

The RBI has also asked the banks to tell borrowers to opt for alternative source of business so that the loan amount does not turn into a bad debt, Raikar said, adding the borrowers would be given a breathing space till they manage alternative source of income.

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