October 09, 2005
The Chairman/Managing Director/ Chief Executive
Officer
All scheduled commercial banks
Dear Sir,
Guidelines for relief measures by banks in
areas hit by earthquake in Jammu & Kashmir and other parts of North India
As you are aware, the State of Jammu & Kashmir
and other parts of North India have been affected by an earthquake, resulting
in heavy damage to life and property. The convenor bank of the State Level Bankers’
Committee (SLBC) of the State of Jammu & Kashmir 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.
2. In terms of paragraph 25 of the above circular,
banks may extend general consumption loans up to 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 lending by commercial banks. In view of
the situation prevailing in the state of Jammu & Kashmir, banks may consider
increasing the limit of consumption loan to be provided to the affected persons
in the state up to 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 etc.
damaged on account of the earthquake.
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