Relief Measures by Banks in Areas Affected by Natural Calamities
The Reserve Bank of India (RBI) has issued Master Directions for banks to provide relief measures in areas affected by natural calamities.
Institutional Framework: Banks are required to establish policies and procedures for dealing with natural calamities, including a blueprint of action. Divisional/Zonal Managers of banks have discretionary powers to take decisions. State Level Bankers’ Committee (SLBC) and District Consultative Committee (DCC) meetings will be held to assess the situation.
Declaration of Natural Calamity: A natural calamity will be declared if the crop loss assessed is 33% or more.
Restructuring of Existing Loans: Banks can restructure existing loans for at least one year, providing benefits to affected borrowers. The Department of Agriculture, Cooperation and Farmers Welfare will provide guidance on the same.
Providing Fresh Loans: Banks will provide fresh loans to affected borrowers, with details to be specified in the Master Directions.
The Master Directions aim to provide relief to borrowers affected by natural calamities, ensuring that banks take proactive measures to mitigate the impact of such events.
Chat with the Master Direction: