Manipur invokes RBI’s riot provisions to aid borrowers

Subject :Economy

Section: Monetary Policy

Concept :

The Manipur state government has announced that the whole State has been impacted due to the riots and violence which has also affected the economic activities and livelihood of the public.
In order to provide the much-needed relief, the State government has invoked a rarely used Reserve Bank of India (RBI) provision pertaining to restructuring and rescheduling of loans.
Such provisions have been mostly invoked in areas affected by natural calamities and not for a law and order situation.

About the Rules

The Reserve Bank of India (Relief Measures by Banks in Areas Affected by Natural Calamities) Directions, 2018 has been issued to banks in regard to matters relating to relief measures to be provided in areas affected by natural calamity.
These Directions are in effect from October 2018.
The RBI provision provides relief to borrowers when economic activity comes to a halt and offers a moratorium on the repayment of loans.
The provisions of these Directions shall apply to every Scheduled Commercial Bank (including Small Finance Banks (SFBs) and excluding Regional Rural Banks (RRBs)) licensed to operate in India by Reserve Bank of India.