No general ban on opening a current account; RBI following a graduated approach: DG Rao
There is no “blanket ban” on opening current accounts and the Reserve Bank follows a “graduated approach” based on the overall exposure of the banking system to an account, the deputy said on Friday. Governor M Rajeshwar Rao.
The claim came amid reports that many small businesses suffered an account freeze after the July 31 deadline for revised standards. The RBI responded by extending the deadline for applying the new standards to October 31.
“There is no general ban on opening current accounts. We are following a gradual approach,” Rao told reporters at the post-policy review press conference.
There is no restriction on opening the current account if the borrower’s exposure is less than 5 crore rupees and if he has not benefited from CC / OD facilities (cash credit and overdraft) from a bank, Rao said. If the exposure is Rs 5 crore and more, but less than Rs 50 crore, there is no restriction on opening a checking account for these borrowers, but borrowing checking accounts cannot be used only for collection purposes, he added.
For the CC / OD front, the technology allows banking anywhere and anytime for such things, so there is no likelihood of disruption when it comes to opening current accounts. , said the CEO.
“The proposal that we have tried to implement ensures better discipline on borrowers. We have been very flexible with borrowers, ”he said.
The RBI addressed issues regarding the opening of the current account and the operation of the current account in the FAQ (frequently asked questions) published in December, he added. “Now, given some of the concerns expressed by the banks, we have extended the deadline until October 31 and will address the issues in consultation with IBA and the banks so that any residual issues can be resolved,” he said. declared.