The Hindu Business Line : RBI hikes loan limit for quake-hit in J&K

IN an effort to provide speedy assistance to the earthquake-affected people in Jammu & Kashmir, the Reserve Bank of India has advised banks to increase the consumption loan limit from Rs 1,000 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, the apex bank said in a release on Sunday.

Calling on banks to liberally extend its relief package to J&K, the RBI advised them to consider financial assistance for reconstruction and repairs caused by the earthquake.

They were also asked to restore banking services in the quake-hit regions at the earliest, so that relief could be provided to the affected.

In its notification, the apex bank further directed bank branches to initiate the package of measures immediately along with the guidelines outlined for relief measures in areas affected by natural calamities.

This would provide for financial assistance to agriculturists, small-scale industrial units, artisans, small businesses and trading establishments affected by the calamity.

Besides consumption loans to the affected, the package also includes 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 provides term loans to affected people 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 RBI note said.

The apex bank has asked the convenor bank for J&K to convene a Special State Level Bankers' Committee meeting immediately to discuss the situation, consider and recommend any special measures that might be required in the affected areas in addition to the RBI's relief package.

It has asked the convenor bank to also invite National Housing Bank (NHB) and Small Industrial Development Bank of India to this meeting.

The NHB has been asked to consider provision of financial assistance for the purpose of construction/repairs of dwelling units damaged by the earthquake.

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