The Reserve Bank of India (RBI) on Monday allowed some accounts to be excluded from circulation in August, in which the regulator specified some rules on opening current accounts with banks.
On Aug. 6, the central bank said borrowers with more than ₹A 50-crore exposure to the banking system must have a trust mechanism and only banks managing such trust accounts can open current accounts. Companies with less than ₹A 50-crore exposure will have fewer restrictions on opening such accounts.
“After review, it was decided to allow banks to open specific accounts subject to various statutes and instructions of other regulators / regulatory departments without restrictions placed in accordance with the above-mentioned circular with August 6, 2020,” RBI said. cases include real estate accounts projected under section 4 (2) l (D) of the Real Estate (Regulation and Development) Act, 2016, to keep 70% of down payments collected by home buyers, knotted or trustworthy. accounts of payment aggregators or prepaid payment instrument issuers for specific activities as permitted by RBI under the Payment and Regulation System Act, 2007, accounts for settlement of debits related to debit card, ATM card, and credit card issuers or acquirers.
The exclusions depend on the condition that the banks ensure that these accounts are used only for specific transactions, the RBI said. Banks should also mark these accounts in the core banking solution (CBS) for easy verification. “Banks will check all current accounts and CC / OD regularly, at least semi-annually, specifically in relation to the exposure of the banking system to the borrower, to ensure compliance with instructions contained in a circular dated 6 August 2020.”
On November 2, RBI allowed banks time until December 15 to comply with its guidelines on opening current accounts.
The central bank said banks can calculate the overall exposure for the purpose of these guidelines based on the available information from central credit information repository (CRILC), credit information companies (CIC), National e-governance Services Ltd (NeSL) and obtaining the declaration of customers if necessary.
Mint reported on Aug. 13 that several foreign and private lenders have questioned the definition of “loan exposure” in the circular, which prohibits corporate borrowers from operating multiple checking accounts.