RBI relief measures for natural calamities

Mumbai, Apr 13 (UNI) Reserve Bank of India (RBI) today issued guidelines to the commercial banks on providing relief to the customers in areas affected by natural calamities that allow banks raising the consumption loan limit from Rs 250 to Rs 10,000 without any collateral and with a provision for further enhancement to Rs 25,000 at the bank's discretion.

The measures also include freezing the account and lowering interest rates as well as avoiding reporting adverse credit information.

Currently, such relief measures are largely confined to agriculture and priority sector loans.

During calamities such as tsunami, heavy rains, floods and earthquakes in some parts of the country, a number of instances relating to functioning of ATMs, opening of accounts of small customers, operations of accounts in the absence of documents and failure of computer networks came to the notice of the Reserve Bank.

The Mid-Term Review of the Monetary Policy Statement for 2005-2006 had announced that an Internal Working Group would look into the whole gamut of issues involved and to suggest suitable revisions and additions to the existing guidelines to make them comprehensive.

Accordingly, the Reserve Bank constituted an Internal Working Group under the Chairmanship of G. Srinivasan, Chief General Manager, Rural Planning Credit Department which recommended, among other things, allowing opening of new accounts, customers of one bank to use ATM networks of other banks for cash withdrawals with charges being borne by the parent bank, increasing ATM daily cash withdrawal limits and dispensing cash through mobile ATMs.

The group has also recommended deferring of payments and waiving of late fees and penalties related to the non-payment of the dues in respect of credit cardholders residing in the areas affected by natural calamity for a period of one to two months and avoiding reporting of adverse credit information may also be considered by credit card issuing banks.

Banks were also advised to formulate a full-fledged comprehensive business continuity plan which should include opening of temporary branches for a period of 30 days, opening of satellite offices, extension counters or mobile banking facilities, alternative arrangements for supply of currency notes in the affected areas, opening of repositories at post offices and treasuries and facilitating expeditious opening of bank accounts.

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