RBI changes current account rules for banks. Details here
The Reserve Bank of India (RBI) relaxed current account rules for bank exposures below ??5 crores. The decision was made after comments from the Association of Indian Banks (IBA) and other stakeholders.
“It has been decided that banks can open current accounts for borrowers who have benefited from credit facilities in the form of cash (CC) / overdraft (OD) credit from the banking system,” RBI said in a statement.
For borrowers, where the exposure of the banking system is less than ??5 crore, there are no restrictions on the opening of current accounts or the provision of CC / OD facilities by banks, subject to obtaining from these borrowers a commitment to inform the banks, as and when as the credit facilities available to them with the bank, the system reaches ??5 crores or more.
In addition, other lending banks may only open collection accounts on the condition that funds deposited into those collection accounts are returned within two business days of receipt of such funds to the CC / OD account maintained with the aforementioned bank maintaining current accounts for the borrower.
Never miss a story! Stay connected and informed with Mint. Download our app now !!