RBI may allow bank branches to relocate for meeting calamity needs

Mumbai: The Reserve Bank of India (RBI) has allowed banks to function from temporary premises, under its instructions, in order to quickly restore banking services in areas affected by natural calamities.

The RBI has issued instructions to banks which 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 relief announced by the government and its 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 state that 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. They could also cater the services through other channels such as 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, the guidelines stated.

While extending financial assistance to their existing customers, banks may provide consumption loans up to Rs10,000 without collateral; extend timely fresh financial assistance to resume productive activities not only to the existing borrowers, but also to other eligible borrowers. Depending on the severity of the calamity and its recurrence, the banks need to extend the period of repayment of restructured term loans ranging from 7 to 10 years with one year of moratorium, RBI said in its guidelines to banks.