RBI activates relief package for flood affected parts of Bihar

Subscribe to Oneindia News

Mumbai, Sep 2 (UNI) The Reserve Bank of India (RBI) has activated its relief package in floodaffected districts of Bihar and was in constant dialogue with the State government and banks to assess the situation for taking additional measures.

The Apex bank, in a release here, said that special mesures were also being taken to ensure the movement and adequate supply of currency notes in these areas.

At the instance of the Reserve Bank, an emergency meeting of the controlling heads of banks was convened on August 28 in Patna.

Under the RBI package, bank branches are required to initiate the measures immediately after the district/state authorities declare the district/State as a calamity hit area and to provide financial assistance to the affected agriculturists, small scale industrial units, artisans, small businesses and trading establishments.

The measures includes consumption loans to persons affected by calamities for sustenance, waiver of margin requirements or considering as margin the grants, subsidies provided by state governments, provision of credit not only to existing borrowers but also to other eligible persons within the jurisdiction of the bank branch, who are not covered by any other financial intermediary as also conversion and rescheduling/restructuring of existing loans in the case of crop failure due to natural calamities. The package also includes providing to affected persons term loans for developmental purposes. Further, the banks, while using their discretion on charging interest are required to view such cases sympathetically and consider waiving of penal interest to be charged for default of current dues and deferment of compounding of interest.

The RBI instructions are aimed at ensuring quick restoration of all banking services in areas affected by floods. According to the Reserve Bank guidelines, in areas where the bank branches are affected by natural calamity and are unable to function normally, they may operate from temporary premises, under advice to the Reserve Bank.

Banks may also ensure rendering their services to the affected areas by setting up satellite offices, extension counters or mobile banking facilities. Further, to satisfy customer's immediate cash requirements, banks could consider waiving the penalties for accessing accounts, such as, fixed deposits. Restoration of the functioning of ATMs at the earliest or making alternate arrangements for providing such facilities may be given due importance. Banks may consider putting in place arrangements for allowing their customers to access other ATM networks, mobile ATMs.

Banks are allowed to open cash repositories for temporary period, reckoned as part of the currency chest balances for meeting cash requirements in the areas where currency chest services are dislocated.

While extending financial assistance, banks may provide consumption loans of up to Rs 10,000 or higher, as the banks may decide, which could be used by those affected for food, shelter and other materials, extend timely fresh financial assistance to resume productive activities not only to the existing borrowers, but also to other eligible borrowers, and depending on the severity of the calamity and its recurrence, extend the period of repayment of restructured term loans ranging from seven to ten years with one year of moratorium.

UNI VK SR RR SSC1554

Please Wait while comments are loading...