RBI extends deadline for implementation of current account norms: Here’s how businesses will benefit from the new rules

New Delhi: The Reserve Bank of India (RBI) on Wednesday (August 4) announced extension of time limit for banks to implement circulars on new rules regarding opening of current accounts. According to the new notification of RBI, banks will have to follow the new rules related to opening current accounts by 31 October 2021. RBI had introduced these circulars in a circular last year.

Earlier, RBI had set July 31, 2021 as the deadline for implementation of the rules. The time limit has been extended so that customers do not face any problem as banks follow the new rules.

RBI said in a statement that the directions were issued to enforce credit discipline among borrowers as well as to facilitate better monitoring by lenders.

“A graded approach was prescribed on opening and operating current account and CC/OD facilities. Banks were required to implement these instructions in a non-disruptive manner, while keeping in mind the genuine business needs of the borrowers,” notes the regulator.

What are the new rules?

1. Business customers can open multiple current bank accounts provided they have not availed cash credit (CC) or overdraft facility (OD) from any bank. The exposure to the banking system for such borrowers should be less than Rs 5 crore.

2. In case of borrowers who have not availed CC/OD facility from any bank and the exposure to the banking system exceeds Rs. 5 crore or more but Rs. 50 crores, there is no restriction on lending to banks to such borrowers. By opening a current account. Even non-lending banks can open current accounts for such borrowers, but only for collection purposes. Read also: Gold price today, August 4, 2021: Gold cheaper by Rs 8300 from record level, right time to invest?

3. The restriction is applicable to the borrowers if they avail CC/OD facility as all the operations which can be done from one current account can also be done from one CC/OD account as in CBS environment the banks are one-bank. Follow the one-branch-one-customer model as opposed to the one-branch-one-customer model. Read also: Record performance in the market due to earnings growth; Sensex climbs 54,000 points for the first time

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