Under the new rules of the central bank, banks can now open current accounts also of those borrowers who have taken credit facility from the banking system through cash credit ie CC (Cash Credit) or overdraft (OD). However, the condition for this is that this loan should be less than Rs 5 crore.
New Delhi. Reserve Bank of India i.e. RBI has relaxed the rules regarding current account. Under the new rules of the central bank, banks can now open current accounts also of those borrowers who have taken credit facility from the banking system through cash credit ie CC (Cash Credit) or overdraft (OD). However, the condition for this is that this loan should be less than Rs 5 crore.
The central bank has made this change in the rules after suggestions from the Indian Banks Association (IBA) and other stakeholders. Earlier, the Reserve Bank of India had tightened the rules related to current account in August 2020 to reduce the cases of fraud related to loans. The Reserve Bank had prohibited banks from opening current accounts of customers who have taken loans from other banks and all those transactions were done through accounts with CC or OD facility.
Those who take loans from other banks will also get the facility
A statement issued by the Reserve Bank of India said, “It has been decided that banks can open current accounts of those borrowers who have availed credit facilities from the banking system i.e. in the form of cash CC or OD from other banks. Is raised.”
If the loan exceeds Rs 5 crore, the bank will have to tell
There is no restriction on opening of current account or provision of CC/OD facility by banks for borrowers who have taken loan of less than 5 crores. However, for this, the borrowers will have to give an undertaking to the bank that whenever the limit of loan taken from the banking system on them reaches Rs 5 crore or more, they will inform the bank.
