What changed
The original circular (August 6, 2020) required banks to comply with current account opening instructions by November 5, 2020. Due to operational queries from banks, RBI has extended this deadline to December 15, 2020, pending the release of a FAQ. All other instructions from the August circular remain unchanged.
What it means for you
Banks get an additional 40 days to align existing current and cash credit/overdraft accounts with the new discipline norms. This extension gives lenders breathing room to resolve operational issues and await RBI's clarifications. However, the core regulatory intent remains intact, so banks must use this time to prepare for full compliance by mid-December.
What you must do
- Review all existing current and CC/OD accounts to identify those needing adjustment under the August 2020 circular.
- Update internal compliance timelines to ensure full adherence by December 15, 2020.
- Prepare for the upcoming FAQ by documenting operational challenges and coordinating with your compliance team.
- Communicate the revised deadline to relevant branches and relationship managers to avoid last-minute rushes.
Who it affects
All scheduled commercial banks, All payments banks, Bank branches handling current accounts and CC/OD facilities, Compliance and operations teams
Why did RBI extend the compliance deadline for current account rules?
RBI received several operational queries from banks regarding the maintenance of existing current accounts. To allow time for these issues to be addressed via a forthcoming FAQ, the deadline was moved from November 5 to December 15, 2020.
Does this extension change any other requirements from the August 2020 circular?
No. Only the compliance deadline for existing accounts (Para 4 of the August circular) has been extended. All other instructions remain unchanged.
What should banks do while waiting for the FAQ?
Banks should continue preparing for compliance by reviewing their current account portfolios and identifying accounts that need restructuring. They should also document any operational issues to cross-check against the upcoming FAQ.