RBI tweaks current account opening rules for borrowers

The Reserve Bank of India has allowed banks to open current accounts of borrowers with credit exposure, subject to safeguard provisions.

In a notification, it 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).

The RBI has placed no restriction on opening of current accounts or on provision of CC or 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.

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