Air India Ltd has won the central bank’s approval for a debt recast plan crucial to the state-run carrier receiving desperately needed government funds over the next 10 years. The Reserve Bank of India (RBI) has, however, approved some of the loss-making carrier’s proposals while rejecting others, according to two senior executives of the airline.

RBI has told Air India in a communication that banks may be allowed to treat the national carrier’s loans as standard assets even after a debt recast.

Standard assets are loans that have not turned bad and for which banks only need to set aside a minimum amount. Once an asset is classified as a non-performing one, banks are required to set aside 70% of the amount.

The debt recast is “quite fair” and will “offer a big relief” to Air India, said Vaibhav Agrawal, vice-president (research) at domestic brokerage Angel Broking Ltd.

Meanwhile, Air India met 15 bankers on Monday in New Delhi and the lenders broadly agreed to the carrier’s debt restructuring proposals, according to a senior civil aviation ministry official. However, the banks have asked Air India to press RBI for some more relaxations. “The banks requested Air India to renegotiate with RBI for better terms for treating non-performing assets,” he said, without elaborating.

The ministry official said a group of ministers headed by Union finance minister Pranab Mukherjee will meet Tuesday to decide on the next equity infusion of Rs. 6,750 crore in Air India.