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In the wake of wide spread devastation caused by severe cyclonic storm Phailin and subsequent floods in Odisha, the state level bankers committee (SLBC) has asked the bankers to implement RBI (Reserve Bank of India) stipulated guidelines for relief measures in areas affected by natural calamities.
“The recent devastation caused due to occurrence of severe natural calamities ie cyclone and floods in Odisha warrants the active financial support of banks in revival of the economic activities of victims in collaboration with state government. We therefore, request you to instruct all the branches for implementation of the guidelines/action points mentioned in the referred circular to provide financial assistance to the persons/units affected by natural calamities,” SLBC wrote to all the controlling heads of banks (except the Regional Rural Banks) in the state.
Phailin along with floods triggered by it have claimed more than 40 lives and affected about six lakh hectares of crop areas.
As per the RBI guideline, the financial assistance required by borrowers in the event of natural calamity include sanction of consumption loans, fresh loans for resumption of normal business and restructuring of existing loans.
The consumption loans are the loans to existing borrowers for general consumption purposes and may be sanctioned up to Rs 10,000 without any collateral and the limit may be enhanced beyond Rs 10,000 at the discretion of the bank.
Besides, the banks may also provide financial assistance by way of fresh loans to resume productive activities both to the existing borrowers and other eligible borrowers.
To resume operations at the earliest in the natural calamity hit areas, the Business Continuity Planning (BCP) strategy prescribes that in areas, where the bank branches are affected by natural calamity and are unable to function normally, they can operate from temporary premises. For continuing operation from the temporary premises beyond 30 days, the approval of the concerned regional office (RO) of RBI is required.
Similarly to meet the customers’ immediate cash requirements, the banks may waive the penalties related to accessing accounts such as fixed deposits.
The RBI guidelines direct the banks for restoration of the functioning of ATMs at the earliest or making alternate arrangements to provide such facilities.
Banks may consider putting in place arrangements for allowing their customers to access other ATM networks and mobile ATMs, read the circular.
It also allowed to vest the divisional/ zonal managers of commercial banks with certain discretionary powers so that they do not have to seek fresh approvals from their central offices to the line of action agreed to by the district/ state level bankers’ committees.
