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Chennai floods: Banks to consider loan recasts after easing EMI rules

To help victims, bank officials are standing near ATM machines, hospitals, railway stations and other important places to dispense cash with hand-held machines.

Written by George Mathew | Mumbai | Published: December 7, 2015 12:55 am
chennai floods, chennai rains, chennai flood relief, bank loans chennai floods, chennai flood monetary relief, business news, india news, tamil nadu news, latest news People wade through flood waters in rain-hit Chennai. (Source: PTI)

The State Level Bankers Committee (SLBC) of Tamil Nadu will meet in the next two-three days to consider various relief measures, including rescheduling and granting of fresh loans to people and small and medium units affected by the floods in Chennai and surrounding areas.

“Indian Overseas Bank, the lead bank, will convene the SLBC meeting once the state government authorities officially declare the region as an affected area. Various measures like rescheduling of loan and issue of fresh loan will be considered,” said a senior official of State Bank of India.

Most banks, including SBI, public sector banks, ICICI Bank and HDFC Bank, have already announced waiver of penalty on late payment on credit cards and processing charges for new loans. SBI has also announced salary advance loan for three months to their customers.

The Reserve Bank of India had issued detailed guidelines for relief measures to be undertaken by banks in areas affected by natural calamities. “A view needs to be taken by SLBC depending on the severity of the calamity as to whether a general reschedulement of all other loans (besides the agriculture loans) such as loans granted for allied activities and loans given to rural artisans, traders, micro/small industrial units or in case of extreme situations, medium enterprises is required,” the RBI guidelines say.

The RBI says rural artisans, self-employed persons, micro and small industrial units, etc. in the areas affected by natural calamities may require the credit to sustain their livelihood. “Banks may also grant consumption loans up to Rs 10,000 to existing borrowers without any collateral. The limit may, however, be enhanced beyond Rs 10,000 at the discretion of the bank,” it said.

“In respect of current dues in default, no penal interest will be charged. The banks should also suitably defer the compounding of interest charges. Banks may not levy any penal interest and consider waiving penal interest, if any, already charged in regard to the loans converted/rescheduled,” the RBI guidelines dated March 25, 2015 say.

As many persons displaced or adversely affected by a major calamity may not have access to their normal identification and personal records, banks may resort to non-documentary verification methods, it says. They can open a small account based on the photograph and signature or thumb impression in front of the bank official.

Mahesh Babu, chief general manager (Chennai circle), SBI, said: “We had airlifted 300 PoS (point of sale) machines from Mumbai to help people in meeting their requirements. We are also providing 50 per cent salary advances to our customers so that they can take care of their immediate needs.”

According to Babu, bank officials are standing near ATM machines, hospitals, railway stations and other important places to dispense cash with hand-held machines. The bank has provided waiver of processing fee for home loans top up, gold loan, personal loans (salary loans), pension loans and extension will be provided for special soft loans for car repairs and salary advance loans for 3 months salary.

An ICICI Bank spokesperson said: “ICICI Bank will not levy any penalty for its customers in Chennai for delay in EMI and credit card payments for the month of November. It will also waive off charges for cheque bounce in the same period.”

 

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