What changed
RBI has carved out exceptions to its August 6, 2020 restrictions on current accounts. Banks can now open accounts mandated by statutes or other regulators (e.g., RERA escrow, IPO accounts, tax collection accounts) without the earlier limits. These accounts must be flagged in CBS and used only for permitted transactions.
What it means for you
Banks can now serve borrowers needing statutory current accounts without violating the August 6 circular. This reduces friction for real estate, capital markets, and tax collection activities. Lenders must still monitor aggregate exposure half-yearly and ensure these accounts are not misused for general transactions.
What you must do
- Flag all newly opened statutory current accounts in CBS for easy monitoring.
- Ensure these accounts are used only for the specific permitted transactions listed in the circular.
- Monitor all current accounts and CC/ODs at least half-yearly for compliance with aggregate exposure limits.
- Note that the NOC requirement was already removed by the August 6, 2020 circular; update internal policies accordingly if not already done.
Who it affects
Scheduled Commercial Banks, Payments Banks, Borrowers with statutory current accounts (e.g., real estate developers, IPO issuers, tax collectors), Payment aggregators and prepaid payment instrument issuers
Do banks still need a No Objection Certificate (NOC) before opening a current account?
No, the requirement for NOC has been removed by the August 6, 2020 circular. Banks can open current accounts without NOC, subject to the revised guidelines.
How should banks calculate aggregate exposure for monitoring current accounts?
Banks can use data from CRILC, Credit Information Companies, NeSL, or customer declarations. Only exposures of Scheduled Commercial Banks and Payments Banks are included, not NBFCs or other institutions.