Banks, which already have an exposure of over Rs 80,000 crore to airline majors, are shying away from providing any further financial assistance to the cash-starved sector.
Jet Airways and SpiceJet also posted losses recently.
Banks have an exposure of Rs 43,000 crore to Air India, Rs 13,000 to Jet and Rs 7,000 crore to Kingfisher. Banks are closely watching the performances of each of the loan accounts.
The gross non performing assets (NPAs) of public sector banks for the period ending March stood at Rs 71,047 crore. The figure is set to significantly rise with several corporate loans turning bad.
"We are not in favour of providing any further loan to airline majors, especially in the private sector," a public sector bank chairman told HT.