No threat to asset quality of banks: Rangarajan

HYDERABAD: There is no threat to the asset quality of Indian banks in the immediate future due to huge exposure to crisis-hit sectors such as microfinance, aviation, real estate and telecom, Chairman of Economic Advisory Council to the Prime Minister, C Rangarajan said on Tuesday.

He said presently the asset quality is well within limits and under norms set by the RBI.

"As of now, the asset quality of the banks is well within the limits as prescribed by the Reserve Bank of India. But, the extent of the exposure to each industry is a matter that needs to be reviewed by the banks every year taking into account how that particular industry is behaving," Rangarajan told media persons on the sidelines of an event organised by University of Hyderabad here.

In the recent past, analysts have raised concerns over the exposure of banks to these sectors. In the aviation sector, country's top airlines like Kingfisher Airlines and national carrier Air India, owe about USD 10 billion to banks.

Some banks have reportedly restructured some of the debt due to recession and other reasons.