Debt Relief in Event of Occurrence of Natural Calamities
Reserve Bank of India has issued standing guidelines to the banks for providing relief to the farmers in areas affected by natural calamities. These guidelines have been issued to enable the banks to take uniform and concerted action expeditiously, particularly to provide the financial assistance to the farmers affected by natural calamities. These guidelines envisages inter-alia:
- Conversion/rescheduling of loans in the event of natural calamity for periods ranging from 3 to 9 years depending upon the successive crop failure/intensity of damage of crops.
- Grant of fresh crop loans to affected farmers
- Conversion of principal as well as interest due on the existing loans
- Grant of consumption loans
- Not to compound interest of loans converted/ rescheduled etc.
- Not to charge penal interest in respect of current dues in default