What changed
The deadline for implementing the August 2020 current account circular is extended to October 31, 2021. Exemptions are now explicitly extended to Cash-in-Transit companies and Cash Replenishment Agencies, similar to White Label ATM operators. Banks are required to set up monitoring at head office and regional levels to ensure non-disruptive implementation.
What it means for you
Banks get more time to operationalize the discipline on current accounts and CC/OD facilities without disrupting genuine business needs. The exemption for CIT/CRAs reduces compliance burden for these entities. Banks must actively engage borrowers and use IBA for unresolved issues, reinforcing the one-bank-one-customer model.
What you must do
- Update internal systems to implement current account restrictions by October 31, 2021.
- Engage with borrowers to resolve operational issues and document mutually satisfactory arrangements.
- Escalate unresolved issues to Indian Banks' Association (IBA) for guidance by September 30, 2021.
- Set up monitoring mechanisms at head office and regional/zonal levels to track implementation and minimize customer inconvenience.
- Ensure no current accounts are opened for borrowers with agricultural/personal OD or OD against deposits.
Who it affects
All Scheduled Commercial Banks, All Payments Banks, Borrowers with CC/OD facilities, Cash-in-Transit (CIT) Companies, Cash Replenishment Agencies (CRAs), White Label ATM operators and their agents
What is the new deadline for implementing the current account circular?
The deadline is extended to October 31, 2021, to allow banks time to resolve operational issues with borrowers.
Are Cash-in-Transit companies exempt from the current account restrictions?
Yes, CIT companies and Cash Replenishment Agencies are now explicitly exempt, similar to White Label ATM operators.
What should banks do if they cannot resolve issues with borrowers?
Banks should escalate unresolved issues to the Indian Banks' Association (IBA) for guidance by September 30, 2021.