The Hindu Business Line : Banks told to be liberal with loans to flood-hit in TN

THE Reserve Bank of India has directed banks to increase the limit of consumption loans to Rs 5,000 without any collateral for the flood-affected people in Tamil Nadu.

A notification issued by the central bank also said that this limit may be enhanced to Rs 10,000 at the discretion of the branch manager, depending on the repaying capacity of the borrower.

Banks have also been asked to provide financial assistance to the affected small enterprises for restoring normal work. Banks can sanction need-based fresh working capital to the affected units, keeping in view the viability of the proposals. As part of the relief measures, Special District Consultative Committees will be convened in the affected districts to look into specific packages for each of the affected areas.

At a meeting held on Monday, the State Level Banker's Committee, comprising officials of the State government, RBI, banks and financial institutions, has also decided to set up a special task force.

The task force will comprise senior officials of the RBI, banks, National Bank for Agriculture and Rural Development, National Housing Bank, Small Industries and Development Bank of India, Life Insurance Corporation and also United India Insurance.

The task force will assess the extent of the damage and specifically recommend special relief measures, which may be needed.

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