What changed
RBI inserted a new definition for 'Current Account' and renamed a section to 'Maintenance of Current Accounts'. It introduced a framework where banks can maintain current accounts without restriction only for customers with aggregate banking system exposure below ₹10 crore; for exposure of ₹10 crore or more, only collection accounts are allowed, with funds remitted within two working days to a designated CC, current, or OD account.
What it means for you
Banks must now monitor customer exposure across the banking system to determine if a current account or only a collection account can be maintained. This strengthens credit discipline and transaction monitoring, but increases operational burden for lenders to track exposure and ensure timely remittance of collection account funds.
What you must do
- Update internal systems to check aggregate banking system exposure for each customer before opening or maintaining current accounts.
- Implement processes to convert existing current accounts for customers with exposure ≥₹10 crore to collection accounts, with two-day remittance to designated accounts (statutory dues may be debited before remittance).
- Train staff on the new definition of 'Current Account' and the exemptions for FEMA, statutory, and regulator-regulated entity accounts.
- Monitor accounts at least once every half-year for ongoing compliance.
Who it affects
Commercial Banks (including Small Finance Banks, Local Area Banks, RRBs), Urban Co-operative Banks, Rural Co-operative Banks, Customers with banking system exposure of ₹10 crore or more
What is the new threshold for unrestricted current accounts?
A bank may maintain a current account without restriction only if the customer's aggregate exposure from the banking system is less than ₹10 crore.
What happens if a customer's exposure is ₹10 crore or more?
The bank can only maintain a collection account for such customers, and funds must be remitted to a designated CC, current, or OD account within two working days, except for statutory dues.
Are there any exemptions to these restrictions?
Yes, accounts under FEMA, those mandated by statute or financial sector regulators (RBI, SEBI, IRDAI, PFRDA), and accounts of entities regulated by these regulators for regulated activities are exempt.