Bank of Baroda has made a provisioning of Rs 500 crore in the fourth quarter of FY23 against its loan exposure to cash-strapped airline Go First, the state-owned lender’s managing director and CEO Sanjiv Chadha said.

The state-owned bank has an exposure of Rs 1,300 crore to the Wadia-owned troubled airline. This excludes exposure guaranteed by the government under the Emergency Credit Line Guarantee Scheme.

Out of this exposure, about Rs 1,000 crore is collateralised by tangible securities and by way of corporate guarantees. “In Q4, the bank has gone ahead to make provision of Rs 500 crore for this account. Which means any potential downside has been fully taken into account and the bank is completely protected as far as this account is concerned,” Chadha told reporters.

Earlier, the National Company Law Appellate Tribunal (NCLAT) upheld insolvency resolution proceedings against Go First, derailing aircraft lessors’ efforts to take back their planes from the struggling Wadia group firm. 

On 10 May 2023, NCLT had admitted the plea of Go First to initiate voluntary insolvency resolution proceedings and appointed an interim resolution professional (IRP) to suspend the company’s board.