Will explore the possibility of interest subvention facilities for borrowers affected by natural calamity: Sukhu

The State Level Bankers Committee (SLBC) in consultation with the RBI will explore the possibility of interest subvention facilities for borrowers affected by natural calamities. This move by the State Government is expected to provide much-needed financial relief to affected borrowers, aiding them in their recovery efforts as they rebuild their lives and businesses in the wake of devastating natural calamity,” said Chief Minister, Thakur Sukhvinder Singh Sukhu.  Keeping in view the hardships faced by borrowers in areas ravaged by unprecedented monsoon rains triggering flash floods and landslides, the State Government has taken decisive action to restructure loans. The decision aims to provide relief to those whose economic stability has been severely affected due to the disaster.

Subsequent to the declaration of the State as a naturally affected area on 18th August 2023, consultations with banks culminated in the finalization of these essential measures. This initiative focuses on rescheduling all types of existing loans, including those taken for Micro, Small, and Medium Enterprises (MSMEs), retail, and others, excluding advances related to agriculture and allied activities. In accordance with the RBI circular, relief measures for loans extended to agriculture and allied activities will be provided following an assessment of crop losses by the State Government, he said.

To determine eligibility for relief measures, the accounts, that were not overdue, as on 24th June, 2023, will qualify for loan restructuring. The entire restructuring process will be completed within three months from the date of the State Government’s declaration of the natural calamity i.e. 18th August, 2023, he said.

The Chief Minister said that for those eligible, a moratorium period will be implemented, allowing a deferment of principal instalment payments for up to 12 months from the date of implementing the need-based restructuring measures, assessed on a case-by-case basis. This significant relief effort extends to all regulated entities of the Reserve Bank of India (RBI), including Scheduled Commercial Banks, Regional Rural Banks, Cooperative Banks (both rural and urban) and Small Finance Banks.

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