RBI changes current account rules for customers – RBI makes significant changes to account opening standards, find out what the new rules are

Business Desk, Amar Ujala, Mumbai
Updated Tue, 15 Dec 2020 07:50 PM IST

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The Reserve Bank of India (RBI) on Monday made some significant changes to its current account norms. The central bank has stated in its August Gust Monetary Policy that no bank can open a current bank account i.e. a current account which cannot open a current account for a customer who has availed cash credit or overdraft facility from another bank, and now all transactions are cash credit, or The overdraft will be done by the account.

The standards were to come into effect from November 5, but in the absence of some clarification, the central bank postponed them until December 14. Now, according to the new circular, it will be mandatory for customers to open their current account or overdraft account in the same bank from where they are taking loans. Let me tell you that this rule will apply to customers who have taken a loan of more than Rs 50 crore from a bank.

According to the Reserve Bank, it has often been observed that bank customers take loans from one bank and open a current account by going to another bank, making it very difficult to track the company’s cash flow. Therefore, the RBI issued a circular stating that no bank should open a current account of customers who have availed cash credit or overdraft facility from elsewhere.

The Reserve Bank of India (RBI) on Monday made some significant changes to its current account norms. The central bank has stated in its August Gust Monetary Policy that no bank can open a current bank account i.e. a current account which cannot open a current account for a customer who has availed cash credit or overdraft facility from another bank, and now all transactions are cash credit, or The overdraft will be done by the account.

The standards were to come into effect from November 5, but in the absence of some clarification, the central bank postponed them until December 14. According to the new circular, it will be mandatory for customers to open their current account or overdraft account in the same bank from where they are taking loans. Let me tell you that this rule will apply to customers who have taken a loan of more than Rs 50 crore from a bank.

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Why did the RBI have to take such decisions?

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