RBI big update! Central bank changes current account opening rules for borrowers with exposure

New Delhi: The Reserve Bank of India (RBI) has changed the current account opening rules for borrowers with credit exposure. RBI has allowed banks to open current accounts of borrowers with credit exposure, subject to safeguard provisions.

In a notification, RBI said: "On a review and taking into account feedback received from Indian Banks` Association (IBA) and other stakeholders, it has been decided that banks may open current accounts for borrowers who have availed credit facilities in the form of cash credit (CC) or overdraft (OD) from the banking system (with provisions)."

With the latest change, such borrowers will be allowed to open current accounts without any restriction or on provision of CC of OD facility by banks for borrowers with exposure of less than Rs 5 crore.

However, this provision is 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 Rs 5 crore or more".

However, in cases, the notification said that such borrowers can maintain current accounts with any one of the banks with which it has CC or OD facility, where the exposure is Rs 5 crore or more, "provided that the bank has at least 10 per cent of the exposure of the banking system to that borrower". Also Read: Microsoft tops Apple to become world's most valuable company

"Further, 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 or OD account maintained with the above-mentioned bank maintaining current accounts for the borrower,” the RBI said. Also Read: Good news for older Windows users! Microsoft to roll out Windows 11 for more PCs this week