Our Bureau

Mumbai, Aug. 10

The Reserve Bank of India (RBI) has asked banks to provide immediate financial assistance to those affected by floods and other natural calamities.

As per the instruction issued by the RBI to banks, existing customers of banks affected by calamities will get uninterrupted access to their bank accounts and can also avail themselves of consumption loans up to Rs 10,000 without collateral.

Banks may also extend the period of repayment of restructured term loans ranging from seven to 10 years with one-year moratorium for existing as well as eligible borrowers, depending on the severity of the natural disaster and its recurrence.

Banks must ensure continuous services in case of cheque clearing operations and supply of cash, said an RBI press release. According to the guidelines, banks' branches affected by the calamity may operate from temporary premises. The banks may also continue functioning in the affected areas by opening satellite offices, extension counters or mobile banking facilities.

Keeping in mind the urgent need for cash, the central bank has also instructed banks to consider waiving penalties for accessing fixed deposits before the end of the deposit's tenure.

Conveners of the State Level Bankers' Committee have been asked to hold special meetings in the context of floods in Gujarat, Andhra Pradesh and Maharashtra.

(This article was published in the Business Line print edition dated August 11, 2006)
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