Air India asks RBI to relax loan recast rules

Lenders want to reduce the risk of equity component

The Reserve Bank of India (RBI) might relax rules for Air India’s loan recast scheme because banks are unwilling to take equity in a company that might be difficult to encash.

If negotiations are successful, the RBI will allow a unique arrangement in the Sustainable Structuring of Stressed Asset (S4A) scheme under which Air India plans to recast its loans into equity for banks, according to people familiar with the development.

Two people close to the development said after consultations with the lenders’ consortium, Air India has approached the RBI for relaxation of certain guidelines of the S4A scheme. Primary