The Reserve Bank of India issued instructions
to all scheduled banks for ensuring quick restoration of all banking services
in areas affected by natural calamities. The Reserve Bank's instructions include
providing continued access to the customers to their bank accounts and facilitating
opening of new accounts by persons affected by natural calamities, especially
for availing reliefs given by Government/other agencies. The guidelines also
cover measures to be taken by banks to ensure continuity in other services like
cheque clearing services and supply of cash.
The guidelines were issued as a follow-up
of the recommendations made by an Internal Working Group set by the Reserve
Bank to look into the whole gamut of issues involved in restoration of banking
services in areas affected by natural calamities, in addition to the existing
standing instructions providing relief to such persons. The Reserve Bank set
up the Internal Working Group in accordance with the announcement it had made
in its mid-term policy for 2005-06 in October 2005.
According to the Reserve Bank guidelines, in
areas where the bank branches are affected by natural calamity and are unable
to function normally, banks may operate from temporary premises, under advice
to the Reserve Bank. Banks may also ensure rendering of banking services to
the affected areas by setting up satellite offices, extension counters or mobile
banking facilities. Further, to satisfy customer’s immediate cash requirements,
banks could consider waiving the penalties for accessing accounts, such as,
fixed deposits. Restoration of the functioning of ATMs at the earliest or making
alternate arrangements for providing such facilities may be given due importance.
Banks may consider putting in place arrangements for allowing their customers
to access other ATM networks, mobile ATMs, etc. Banks have been allowed to open
cash repositories for temporary period reckoned as part of the currency chest
balances for meeting cash requirements in the areas where currency chest services
While extending financial assistance, banks
may, to their existing customers, provide consumption loans up to Rs. 10,000
without collateral; extend timely fresh financial assistance to resume productive
activities not only to the existing borrowers, but also to other eligible
borrowers; and depending on the severity of the calamity and its recurrence,
extend the period of repayment of restructured term loans ranging from 7 to
10 years with one year of moratorium.
In the context of the floods in three States
- Gujarat, Andhra Pradesh and Maharashtra - the Reserve Bank has asked the convenors
of the State Level Bankers' Committee (SLBC) to hold special SLBC meetings immediately
and take stock of the measures required to provide relief to those affected.
Chief General Manager
Press Release: 2006-2007/207