Banks to ask RBI for softer loans to assist Gujarat
Banks will soon seek soft loans from the Reserve Bank of India to provide financial assistance to quake-hit Gujarat in the wake of RBI directive for rescheduling of loans and raise additional funds for the people affected by the worst natural calamity in independent India.
Indian Banks Association chairman S S Kohli said that the banks would ask for softer loans similar to the loans that were offered after the super cyclone in Orissa.
Currently, banks obtain refinance from the apex bank at 8 per cent.
Accordingly, an eight-member committee was appointed yesterday headed by Dena Bank chairman P N Joshi and comprising of representatives from Bank of India, Bank of Baroda, Central Bank, NABARD and SIDBI among others, to suggest ways of providing assistance to the state.
"The committee will meet the state chief minister and chief secretary on February 1 to discuss about the financial situation and visit some of the worst affected areas," Kohli said.
The committee will also consult the state-level bankers' committee (SLBC) and is expected to submit the recommendations to the government by February 10, he said.
After the amount of relief assistance is ascertained, the banks would approach RBI for additional loans at a lower interest rate.
Although figures of casualties are still pouring in, an industry estimate has put the extent of damage between Rs 200-250 billion.