What changed
This is a consolidation of existing guidelines into a master circular for 2005-2006, replacing the January 2005 version. No new policy changes were introduced; it compiles all prior instructions on relief measures for natural calamities.
What it means for you
Banks must maintain pre-approved action plans for calamity response, including standing instructions at branches and coordination with district/state authorities. Zonal managers need discretionary powers to approve loan extensions, new loans, and revised scales of finance without central office approval. This ensures faster disbursal of relief credit to affected farmers, small industries, and businesses.
What you must do
- Ensure all branches have standing instructions for calamity response, shared with district collectors and state authorities.
- Empower divisional/zonal managers with discretionary powers for loan restructuring, fresh sanctions, and scale-of-finance changes.
- Convene DCC/SLBC meetings immediately after a calamity to coordinate relief with state/district authorities.
- Factor in government subsidies when determining borrower assistance quantum.
Who it affects
All scheduled commercial banks (excluding RRBs), Regional and zonal offices of banks, District Consultative Committees (DCCs), State Level Bankers' Committees (SLBCs), Borrowers in calamity-affected areas (farmers, small industries, artisans, small businesses)
What is the main purpose of this master circular?
It consolidates all existing RBI guidelines on relief measures for natural calamities into one document, ensuring banks have a uniform, ready-to-use blueprint for quick credit assistance.
Do banks need central office approval for each relief action?
No. The circular mandates that zonal/divisional managers be given discretionary powers to approve loan extensions, new loans, and revised scales of finance without seeking fresh approvals from central offices.
How should banks coordinate with government agencies?
Banks must share standing instructions with state governments and district collectors. After a calamity, DCC and SLBC convenors must hold immediate meetings to align relief efforts with state/district authorities.