RBI Guidelines on Opening Multiple Current Accounts
In October 2021, the Reserve Bank of India revised the conditions to open Current Account with the banks. If you’re a business owner, you must be aware of the new regulations brought in to bring more credit discipline to the country.
Revised Current Account Opening Instructions – RBI
- Banks can offer Current Accounts to borrowers who have availed credit facilities like Cash Credit (CC) or Over Draft (OD) facility with exposure of less than Rs.5 crore.
- If the banking system exposure is more than Rs.5 crore, the borrower can have a Current Account with only one bank with which it has CC/OD facility. Also, the bank must have at least 10% of the banking system’s exposure to the borrower to avail the account facility.
- Other lending banks cannot open any Current Accounts; instead, they can open Collection Accounts, subject to certain conditions. Funds deposited in such collection accounts should be remitted within 2 working days to the CC/OD account maintained by the above-mentioned bank.
- If none of the banks has at least 10% exposure of the banking system to the customer, the lender having the highest exposure can open a current account.
- Non-lending banks cannot open Current Accounts as per the revised regulations.
- Borrowers whose exposure to the banking system is Rs.50 Crore or more – Escrow-managing banks will maintain current accounts.
- Borrowers whose exposure to the banking system is between Rs.5 Crore and Rs.50 Crore – No restriction on opening a current account.
- Borrowers whose exposure to the banking system is less than Rs.5 Crore – Banks can open current accounts subject to conditions. The borrower must inform the bank officials as and when the credit facility availed by them becomes Rs.5 Crore or more.
- No restrictions to open current accounts for those customers who have not availed any CC or OD facility from the banks.