Date:16/04/2006 URL: http://www.thehindubusinessline.com/2006/04/16/stories/2006041603250300.htm

Back Natural calamities: Panel moots relief package for bank customers

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Customers may be allowed to use other banks' ATMs

Key suggestions
The relief measures recommended include raising the consumption loan limit from Rs 250 to Rs 10,000 without any collateral, with provision for further enhancement to Rs 25,000 at the bank's discretion.
The relief package may include freezing the account, lowering of interest rates and avoiding reporting of adverse credit information.

Mumbai , April 15

An internal working group of the Reserve Bank of India (RBI) has recommended a slew of relief measures to bank customers in areas affected by natural calamities.

The group was constituted by the RBI to look into issues such as the functioning of ATMs and opening of accounts of small customers in areas hit by calamities such as tsunami, floods and earthquakes.

The group, in its draft report, has recommended allowing customers of one bank to use the ATM networks of other banks for cash withdrawals with the charges being borne by the parent company.

Besides, the daily cash withdrawal limits shall be increased and cash dispensed through mobile ATMs, according to a release from the RBI.

The group has also suggested deferring of payments and waiving of late fees and penalties related to non-payment of dues by credit cardholders in the calamity-hit areas for a period of one or two months.

The credit card issuing banks may also consider avoiding reporting of adverse credit information in respect of the clients.

Other recommendations

The relief measures recommended by the group include raising the consumption loan limit from Rs 250 to Rs 10,000 without any collateral, with provision for further enhancement to Rs 25,000 at the bank's discretion.

The relief package may include freezing the account, lowering of interest rates and avoiding reporting of adverse credit information.

The group has also recommended that banks may be advised to formulate a full-fledged comprehensive business continuity plan.

This should include opening of temporary branches for a period of 30 days; opening of satellite offices, extension counters or mobile banking facilities; alternative arrangements for supply of currency notes in the affected areas; opening of repositories at post offices and treasuries and facilitating expeditious opening of bank accounts.

To ensure availability of information on the relief measures, the group has also suggested setting up of a control room/helpline at SLBC convenor banks, helpline in RBI and nodal offices in banks in the affected areas.