RBI initiaties relief efforts

The Reserve Bank of India (RBI) today activated its relief package for states affected by Tsunami.

According to a release posted on the central bank website, bank branches are required to initiate the package of measures immediately after the district/state authorities declare the district/state as calamity-affected area, and to provide financial assistance to agriculturists, small scale industrial units, artisans, small businesses and trading establishments affected by natural calamities.

"The measures include 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 bank branch and who is 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, banks, while using their discretion on charging of 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. In addition, the banks have been asked to expeditiously restore banking services in the affected areas."

The central bank has asked banks to convene a state-level bankers committee meeting immediately to discuss the effect of Tsunami in their respective areas, and to consider and recommend any special measures that might be required in the affected states in addition to the Reserve Bank's relief package, the release said.

A task force comprising Deputy Governor V Leeladhar as chairman and G Srinivasan, chief general manager (rural planning and credit department) as member-secretary and some senior executives of the central bank has been formed to monitor the progress of relief and rehabilitation measures through banks and to constantly review the situation to see if any further measures are required to give relief to the affected states, the release said.