The flood-affected people of Kerala may claims over Rs 1,000 crore, the insurance companies expect. The claims would be largely from losses made in motor, property, animal husbandry and crop, The Indian Express reported citing unidentified industry officials. The banking institutions may come out with loan restructuring packages, the report said. On Monday, the customs duty and inter-state taxes on relief material on Kerala were exempted from customs duty, Finance Minister Piyush Goyal tweeted.
The report also said that in the latest meeting of the State Level Bankers’ Committee (SLBC), an action plan for implementing the relief programme in collaboration with state government authorities will be discussed.
Due to slowdown in repayments of loans, four Kerala-based lenders are likely to take a hit. The report also said that the impact may not be immediate as the borrowers may receive a moratorium of nearly two years on loan repayments in cases of long-term loans. A waiver has also been announced on loans of higher interest rates by banks and insurance companies.
Since the people would be unable to repay loans loans as economic activities get affected along with asset loss, relief in loan repayment, by restructuring the existing loan, may become necessary. All the loans of short-duration, which are due to be repaid at the time of occurrence of natural calamity, should be eligible to be restructured, said RBI circular on relief measures in areas hit by natural calamities. The principal amount of the short-term loan as well as interest due for repayment in the year of occurrence of the natural calamity may be converted into term loan, said the RBI circular said.
A special team has been formed by the LIC for quick settlement of individual life policies and the claims made under the Pradhan Mantri Jeevan Jyoti Bima Yojana.
The Kerala floods will result in delay of recoveries and bank losses, financial services firm Jefferies said. The Kerala floods will result in delays and losses for banks, especially in agriculture loans, small and medium enterprises and home loans and credit micro.