July 29, 2005
The Chairman/Managing Director/Chief Executive
Officer
All scheduled commercial banks
Dear Sir,
Guidelines for relief measures by banks
in areas affected by unprecedented rains and floods in Maharashtra
As you are aware, the State of Maharashtra has
been affected by unprecedented rains and floods, resulting in heavy damage to
life and property. The convenor bank of the State Level Bankers’ Committee (SLBC)
of the state has been advised to assess the situation and take immediate measures
to provide appropriate relief to the affected people in terms of our standing
guidelines,vide our Master
Circular RPCD.No.PS.BC.6 /05.04.02-2005-06 dated July 1,2005. In particular,
we draw attention of banks to paragraph 26 to 30 of the said circular regarding
financial assistance to artisan, self-employed, traders, tiny and small scale
industrial units affected by the unprecedented calamity.
2. In terms of paragraph 25 of the above circular,
banks may extend general consumption loans upto Rs.1000 to eligible persons
in the areas affected by natural calamity in the states where the state governments
have constituted risk funds for such lendings by commercial banks. In view of
the situation prevailing in the state of Maharashtra, banks may consider increasing
the limit of consumption loan to be provided to the affected persons in the
state upto Rs. 5,000 without any collateral. This limit may be enhanced to Rs.10,000
at the discretion of the branch manager, depending on the repaying capacity
of the borrower.
3. Banks may also consider provision of financial
assistance for the purpose of repairs/reconstruction of dwelling units and also
to small road transport operators including taxi, auto rickshaw operators affected
by the calamity, keeping in view the viability of the proposals.
4. Banks are, therefore, requested to take immediate
action in this regard and advise their controlling offices/ branches to provide
appropriate relief to the affected persons.
5. Banks are also requested to take necessary
action to expeditiously restore banking services in the affected areas.
6. Please acknowledge receipt.
Yours faithfully,
(G. Srinivasan)
Chief General Manager