INSUBCONTINENT EXCLUSIVE:
RBI has now given time till October 31 to banks to implement its rules on current accountsAcceding to requests from lending institutions to
grant them more time to comply with its last year's circular on current account and overdraft (OD) facilities for large companies, the
Reserve Bank of India (RBI) on Wednesday extended the deadline till October 31, 2021, by which they would have to resolve the
matter.Reiterating its stand on the matter, the RBI again issued the circular related to current accounts and OD facilities and in a stern
message to all lending institutions, said that it will not change the rules and was only extending the deadline, which had ended on July 31,
she has not availed overdraft facility from any bank, and the exposure to the banking system is less than Rs 5 crore.If the exposure is
between Rs 5 crore and Rs 50 crore, the lending bank can allow the customer to open a current account as well, the circular had noted.At the
same time, the circular had emphasised that for large borrowers with Rs 50 crore exposure and above and having several bank exposures,
current account and cash credit (CC) and OD facility has to be with a single bank.In a nutshell, a customer should have a single current
account and only with that bank with which it has a running loan facility, the circular had emphasised
account, the RBI had said.The main aim behind RBI's move was to stop the practice where companies normally take loans from state-owned
banks but ran current accounts with either private or foreign banks, which offer better facilities.The central bank had said that the core
banking system connects all banks and companies should not have issues in integrating their accounts.Following the issuance of the circular,
thousands of current accounts were shut down by banks by July 31, 2021, the deadline fixed by the RBI for completing the process
However as this turned out to be a long winding process, banks sought more time, which has now been extended by RBI till October 31, 2021.
