Rehabilitation benefits by RBI

07/01/2020

The Reserve Bank of India (RBI) has given its nod for rehabilitation benefits to the borrowers across Jammu and Kashmir, who were affected by the recent disturbances in the Union Territory following abrogation of Article 370 and re-organization of the erstwhile State. The relief involving crores of rupees to the J&K borrowers shall be extended as per the "Master Directions on Relief Measures by the banks in areas affected by natural calamities. All eligible loans under Master Directions, which are not overdue as on August 5, 2019, may be reckoned for restructuring while old restructured accounts, which are standard and not overdue may be considered only if they are affected by current disturbances. The period for completing the restructuring exercise has been extended up to June 30, 2020, big borrowers are not eligible for the rehabilitation benefit. The major relief to the borrowers is in response to the recommendations made by the J&K SLBC.
The banks should identify only `genuine borrowers' affected by the disturbance for the restructuring and the RBI has said that the banks may assess the requirement of the individual borrowers in each case and depending on the nature of his/her account, repayment capacity and need for the fresh loans, appropriate decision shall be taken by the individual banks based on viability. As per the RBI `Master Directions', depending on the severity of a natural calamity, SLBC/DDC shall take a view as to whether a general rescheduling of all other loans (besides the agriculture loans) such as loans granted for allied activities, loans to rural artisans, traders, micro/small industrial units or in case of extreme situation, medium enterprises are required. If such a decision is taken, while recovery of all the loans be postponed by the specified period, banks may assess the requirement of the individual borrowers in each case and depending on the nature of his/her account, repayment capacity and the need for fresh loans, appropriate decisions shall be taken by the individual banks.Lt Governor UT of J&K has also requested for relief of large borrowers on the same lines. The contribution of the Government under the Economic Rehabilitation Programme may run in hundreds of crores.

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