The Hindu Business Line : RBI package for tsunami-hit States

THE Reserve Bank of India has announced a relief package for the States devastated by the tsunami disaster and has asked banks to immediately initiate the package of measures in calamity affected areas.

Banks have been asked to provide financial assistance to agriculturists, small-scale industrial units, artisans, small businesses and trading establishments affected by the natural calamity, immediately after the district or State authorities declare the area as calamity affected, said an RBI press release.

The relief measures include consumption loans for sustenance, waiver of margin requirements. The grants and subsidies provided by State Governments can also be considered as margin. Banks may also provide credit not only to existing borrowers but also to other eligible persons within their jurisdiction, who are not covered by any other financial intermediary. Banks have also been asked to convert, reschedule and restructure existing loans in the case of crop failure due to tsunami tragedy.

The package also includes term loans for developmental purposes, for persons affected by the disaster.

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 restore banking services in the affected areas as soon as possible, said the release.

The central bank has asked banks to convene a State Level Bankers Committee meeting immediately to discuss the effect of the 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 RBI's relief package. RBI has also asked its Regional Directors in the affected States to coordinate with the State Governments in this matter. The apex bank is also taking special measures to ensure the movements and adequate supply of currency notes in these areas.

A task force chaired by Mr V. Leeladhar, Deputy Governor, RBI, and Mr G. Srinivasan, Chief General Manager, Rural Planning and Credit Department - as member secretary, along with senior executives of RBI has been formed to monitor relief measures through the banks.

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