The Reserve Bank of India (RBI) on October 29, 2021 issued a notification regarding clarification on Need for Discipline on Opening of current account by banks by referring to circular DOR.No.BP.BC/7/21.04.048/2020-21 dated August 6, 2020 and after getting recommendations from Indian Banks’ Association (IBA) and other stakeholders.
RBI has decided that banks may open current accounts for borrowers who have availed credit facilities in the form of cash credit (CC)/ overdraft (OD) from the banking system as per below provided provisions :
(i) For borrowers, where the exposure of the banking system is less than ₹5 crore, there is no restriction on opening of current accounts or on provision of CC/OD facility by banks, subject to obtaining an undertaking from such borrowers that they shall inform the bank(s), as and when the credit facilities availed by them from the banking system reaches ₹5 crore or more.
(ii) In respect of borrowers where exposure of the banking system is ₹5 crore or more, such borrower can maintain current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the exposure of the banking system to that borrower.
And Other lending banks may open only collection accounts subject to the condition that funds deposited in such collection accounts will be remitted within two working days of receiving such funds, to the CC/OD account maintained with the above-mentioned bank maintaining current accounts for the borrower.
RBI also clarified that borrowers not availing CC/OD facility from the banking system shall continue to maintain current accounts as per para 1(v) of the principal circular regarding the same as hitherto.
RBI also permitted the banks to open/ maintain the following accounts, without any restrictions:
i. Inter-bank accounts
ii. Accounts of All India Financial Institutions (AIFIs), viz., EXIM Bank, NABARD, NHB, and SIDBI
iii. Accounts opened under specific instructions of Central Government and State Governments
iv. Accounts attached by orders of Central or State governments/regulatory body/Courts/investigating agencies etc. wherein the customer cannot undertake any discretionary debits
[Notification No. RBI/2021-22/116 DOR.CRE.REC.63/21.04.048/2021-22 ]
