In a trend-setting move, the Visakhapatnam Urban Co-operative Bank has announced its decision to lend at least Rs.100 crore to cyclone Hudhud affected people of Visakhapatnam, Vizianagaram, Srikakulam, and East Godavari districts.
If required it will lend another Rs.50 crore to Rs.60 crore. The bank will also liberalise sanction norms for limited period from October 24 to December 31.
Bank Chairman Ch. Raghavendra Rao told reporters on Monday that the severe cyclonic storm had left a trail of devastation in the four coastal districts. “We felt it is our responsibility to come to the rescue of the affected people and help them in whatever way possible,” he said.
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A majority of the shareholders of the almost 100-year-old bank were from North Coastal Andhra. “The bank will offer loans in all categories by lowering interest rate by 1 or 2 per cent than normal rate. We wanted to lend at 6 to 7 per cent but RBI norms will not allow us to offer loans at less than the cost of funds,” he pointed out.
Mr. Rao said the bank was contributing Rs.25 lakh towards the Chief Minister’s Cyclone Relief Fund. The employees have also decided to contribute one-day wages for cyclone relief work.
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The bank decided to offer an unsecured loan of Rs. 5,000 to artisans and others who were seriously affected by the cyclone at an interest rate of 10 per cent following the basic KYC norms. He said the loan would be disbursed within 24 hours. Subject to a ceiling of Rs. 2 lakh, all shareholders would be given an unsecured loan of twice the amount of the share capital at 10 to 12 per cent.
There would not be any appraisal or processing fee for gold loans. Loans up to Rs.5 lakh would be sanctioned at the level of manager and those above Rs.5 lakh would be cleared by the top management.
Bank CEO P.V. Narasimha Murthy was present.