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RBI activates Relief Measures in J & K through Banks

The Reserve Bank of India has advised banks to liberally extend its relief package for the State of Jammu & Kashmir, which has been hit by an earthquake leading to destruction of life and property. Banks have also been advised to provide financial assistance for the purpose of repairs/reconstruction of dwelling units, etc., damaged on account of the earthquake.

In addition to these measures, banks have also been advised to increase the limit of consumption loan to be provided to the affected persons in the state up to Rs. 5,000 without any collateral. The limit may be enhanced to Rs. 10,000 at the discretion of the branch manager, depending on the repaying capacity of the borrower. Further, the banks have been asked to expeditiously restore banking services in the affected areas.

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 as also conversion and rescheduling/restructuring of existing loans.

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.

The Reserve Bank has further advised NHB to consider provision of financial assistance for the purpose of construction/repairs of dwelling units, etc., damaged by the earthquake.

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