Moratorium, rescheduling of home, car loans in package for flood-hit TN

CHENNAI: Union finance minister Arun Jaitley said here on Sunday that banks have been asked to go on “mission-mode” to provide relief to the rain and flood-affected.
At a closed-door meeting between Jaitley, the regional director of RBI, senior executives of nationalised and private banks, and senior insurance executives on Sunday, a consensus emerged on these relief measures.Senior bank officials privy to the discussions said that the guidelines with respect to loan rescheduling and moratorium under various heads are broad-based and that no “particular formula” has been arrived at. “The rescheduling and moratorium will depend on a case-to-case basis,” a senior banker said.
Broadly, existing home loans can be rescheduled with a moratorium of one year. In addition, Rs 100 crore will be made available from the Urban Housing Fund of National Housing Bank to banks and home finance companies for refinance.
“The modalities of moratorium in home loans are still being worked out and it will take another week to finalise,” the banker said. “In education loans, this moratorium is nothing but postponement of educational loan installments with no penal interest charged,” the banker said.
Banking sources who attended a meeting with finance minister Arun Jaitley said consumers with damaged vehicles can opt for motor top-up loans at the base rate (the base rate is the minimum rate of interest that a bank is allowed to charge from its customers and it currently ranges from 9.3% to 9.7%). They can also opt for rescheduling of existing loans with a moratorium of six months with the terms being similar to educational loans.
In addition, bankers have also been asked to sanction consumption loans up to Rs 1 lakh for purchase of household articles damaged due to flood at concessional interest rates.
Chairman and managing director of United India Insurance Milind Kharat said that in certain segments like auto, the claim settlement process could not begin since many vehicles have still not been able to make it to the garage due to backlog at such centres. On its part, United India has so far settled 800 claims totalling Rs 12 crore on account of the Chennai floods. The company has so far got 4,500 claims relating to the deluge at a value of Rs 1,068 crore.
Meanwhile the four nationalised insurers (United India Insurance, New India Assurance, National Insurance and Oriental Insurance) had organised a claim settlement camp at their regional offices towards the end of last week. Days after the December 2 deluge, the four public insurers got together to set up nine camps to receive claim initimations.
So far, the nationalised insurers have received 11,811 claims amounting to Rs 1,990 crore of which 1,975 claims have been settled amounting to Rs 26.8 crore. LIC has so far paid 11 claims for Rs 56 lakh.