RBI announces relief package

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Mumbai, Dec 27: The Reserve Bank of India (RBI) on Monday activated its package of relief measures for the states affected by killer tsunami waves. The central bank said bank branches will be required to initiate the package immediately after the authorities declare the district/state as calamity affected area and provide financial assistance to agriculturists, small-scale industrial (SSI) units, artisans, small businesses and trading establishments.

Sunday’s calamity claimed almost 7,000 lives along the coast in the south and the Andaman and Nicobar islands. The worst affected regions are the Union territory of Andaman and Nicobar, coastal areas of Tamil Nadu, Pondicherry, Kerala, and Andhra Pradesh.

The relief measures include consumption loans, waiver of margin requirements or considering grants as margin, subsidies, credit for not only existing borrowers but also others who are not covered by any other financial intermediary as also conversion and rescheduling/restructuring of existing loans in the case of crop failure.

The package also includes term loans for developmental purposes. While charging interest, banks are required to view cases sympathetically and consider waiver of penal interest for defaulters and deferment of compounding of interest.

RBI has also asked banks to convene state-level bankers’ committee meeting immediately to discuss the effect of tsunami in their respective areas and to consider and recommend special measures. Regional directors in the affected states have been asked to co-ordinate with state governments in this matter.

A task force comprising deputy governor V Leeladhar (chairman) and G Srinivasan, chief general manager, rural planning and credit department (member secretary) and some senior RBI executives has been formed to monitor the progress of relief and rehabilitation measures.