Opening of Current Accounts by Banks - Need for Discipline

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..... lar DBR.Leg.BC.25./09.07.005/2015-16 dated July 2, 2015 on the subject. The instructions on opening of current accounts by banks have been reviewed and the revised instructions are as under: i. No bank shall open current accounts for customers who have availed credit facilities in the form of cash credit (CC)/ overdraft (OD) from the banking system and all transactions shall be routed through t .....

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..... may be decided mutually between the borrower and the banks. It may be noted that banks with exposure to the borrower of less than 10 per cent of the exposure of the banking system can offer working capital demand loan (WCDL) / working capital term loan (WCTL) facility to the borrower. iii. Where a bank has a share of 10 per cent or more in the total exposure of the banking system to the borrow .....

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..... ere is no restriction on opening of collection accounts by lending banks subject to the condition that funds will be remitted from these accounts to the said escrow account at the frequency agreed between the bank and the borrower. Further, the balances in such accounts shall not be used as margin for availing any non-fund based credit facilities. While there is no prohibition on amount or numbe .....

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..... rom the banking system becomes ₹5 crore or more. The current account of such customers, as and when the exposure of the banking system becomes ₹5 crore or more and ₹50 crore or more, will be governed by the provisions of para (v) (b) and (v) (a) respectively. (d) Banks are free to open current accounts of prospective customers who have not availed any credit facilities from th .....

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..... ons within a period of three months from the date of this circular. Yours faithfully, (Saurav Sinha) Chief General Manager-in-Charge --- 1 Exposure for the purpose of these instructions shall mean sum of sanctioned fund based and non-fund based credit facilities - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India .....

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