Current account maintenance Deadline Extended

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Over the past few days, small business owners have complained about the closure of their bank accounts, as they have used many circulars on the issue.

 


RBI extends Deadline For Maintenance of current account- Read Here

The Reserve Bank of India (RBI) has allowed time for banks until October 31 to make changes to existing account management, following reports that small businesses have been hit by account ice a few days ago.

The central bank quoted circulars issued in August, November and December last year as saying that this was aimed at strengthening borrowers' morale and facilitating better lending monitoring. The RBI, however, has made it clear that the procedure is set for banks to open and use existing accounts and cash credit / overdraft CC / OD institutions.

"Banks were required to apply these regulations in a non-disruptive manner while maintaining the direct business interests of their borrowers," the RBI said in a statement.

The RBI on Wednesday said it had received requests from banks to find more time to resolve operational issues while using the circular letter and air now extending the date of its launch.

 

“Banks will be allowed until 31 October 2021 to start the provision of this circular. This extension of time will be used by banks to consult with borrowers to reach satisfactory decisions in line with the circular, ”the RBI said.

The central bank went on to say that if the bank was unable to resolve any issue, it could approach the Indian Banks Association (IBA) for redress and the remaining problems could be taken up by the RBI by the industry group that is recruiting the party for resolution.

Accounts of White Label ATM employees and their agents were released in the Current Account circular documents dated August 6, 2020, the company said, adding that as cash-in-transit (CIT) companies or agencies Refunds (CRAs) without the same function, exemptions will also apply to these organizations.

 

The RBI also called on banks to put in place a mechanism to monitor, headquarters and district / zone offices to monitor the non-disruption of this circular and ensure that customers do not incur disruptions during implementation.

The central bank noted that banks are not allowed to open existing accounts for borrowers using agriculture / OD or OD for agriculture when making payments.

It also stated that in the case of lenders who did not receive CC / OD space at any bank, there was no limit to the opening of existing bank accounts if the disclosure of the banking system to those borrowers was less than 5 crore. For those in this category with a banking system exposure up to ₹ 50 crore, lenders can create current accounts.

 

The RBI said the ban applies to borrowers in the event of a CC / OD location because all transactions from the current account can also be done from the CC / OD account as banks in the CBS area follow a single - bank-client model as compared. and a single-client branch model.

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