RBI-bankers meet today on restructuring of barge loans

Going ahead with the best way to tackle outstanding loans of banks to borrowers in the mining industry, the Reserve Bank of India (RBI) has called for a special meeting of all banks with it on Friday.

The meeting will be chaired by Mr J B Bhoria, regional director, RBI, Mumbai, and is most likely to focus only on barge loans, although lending to mining stakeholders includes loans to truckers and machinery operators.
This is Mr Bhoria’s second discussion with banks on loans to the barge sector, as the first was at the State Level Bankers Committee (SLBC) meeting on October 9. About 22 banks are expected to attend the meeting, where barge loans amounting to ` 350 crore would be discussed. Further, the meeting is not open to representatives of the GBOA and will be only between RBI and bankers.
Since the stoppage of mining in Goa, the issue of loans given to barge owners has come up repeatedly with barge owners pointing out their inability to repay. Consequently, banks have agreed to a restructuring of the loans, for a second time, but were not sure whether this was possible as restructuring twice needs special permission of the RBI as well as Indian Bankers’ Association.
As such the RBI appears willing to give the go ahead for a second time restructuring and the meeting on Friday will most probably discuss the terms and conditions for it. Barge loans were first restructured in 2010-11 and were due for repayment from October 2012, onwards.
Secretary of Goa Barge Owners Association (GBOA), Mr William D’Costa, said that they have already met up with the RBI deputy director, Mr Anand Sinha, a fortnight ago to plead their case for a relief package for their sector, along with permission for a second time rescheduling for the loans.
Meanwhile, an exercise conducted by banks in Goa to estimate their total exposure to the mining stakeholders has put the figure at ` 1,030 crore. The figures reveal that truckers are the main borrowers from the banks having a larger share in the advances.
There are about 350 barges in Goa that are involved in ferrying ore from the river to the sea, that are funded through bank credit. The number of trucks involved in mining are estimated at 10,000-12,000.
It is not clear why the bankers meeting on Friday will only discuss barge loans. According to bank sources, one of the reasons why tippers have been left out of the discussion is “lack of organisation.” Interestingly, only 6,400 truckers have registered themselves with the Goa government for a financial relief package.
The RBI-bankers meeting is scheduled for 11 a.m. on Friday at Hotel Crown. [NT]