RBI relaxes current account norms, extends deadline to implement new rules. Check details
The Reserve Bank of India (RBI) on Wednesday issued guidelines for the implementation of the circular on the opening of current accounts by banks. The central bank has given banks time until October end to implement the new rules on current accounts issued in 2020. The regulator had previously set a deadline of July 31.
NEW RULES
1. In the case of borrowers who have not availed of the CC/OD facility from any bank, there is no restriction on the opening of current accounts by any bank if exposure of the banking system to such borrowers is less than ₹5 crore.
2. In the case of borrowers who have not availed of the CC/OD facility from any bank and the exposure of the banking system is ₹5 crore or more but less than ₹50 crore, there is no restriction on lending banks to such borrowers from opening a current account. Even non-lending banks can open current accounts for such borrowers though only for collection purposes.
3. The restriction applies to borrowers in case they avail the CC/OD facility since all operations that can be carried out from a current account can also be carried out from a CC/OD account as banks in a CBS environment follow a one-bank-one-customer model as against a one-branch-one-customer model.
Banks will be permitted time till 31 October, 2021 to implement the provisions of the circular, it said. This extended timeline shall be utilised by banks to engage with their borrowers to arrive at mutually satisfactory resolutions within the ambit of the circular.
The circular said, such issues, which banks are unable to resolve themselves shall be escalated to Indian Banks’ Association (IBA) for appropriate guidance. Residual issues, if any, requiring regulatory consideration shall be flagged by IBA to the Reserve Bank for examination by September 30, 2021.
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