By Administrator_India
The Reserve Bank of India (RBI) on December 14 allowed certain exemptions in new current account rules which will come into effect from December 15 onwards.
Under the new rules, all the scheduled commercial banks and payments banks will be excluded from the RBI’s August 6 circular, in which the regulator specified certain rules for opening of current accounts by banks.
The apex bank in its latest circular excluded accounts for real estate projects, mandated under Section 4 (2) l (D) of the Real Estate (Regulation and Development) Act, 2016, for the purpose of maintaining 70 percent of advance payments collected from the homebuyers.
Apart from this, the RBI exempted nodal or escrow accounts of payment aggregators/prepaid payment instrument issuers for specific activities, which are permitted by the Department of Payments and Settlement Systems (DPSS).
The central bank also exempted accounts for settlement of dues related to debit card/ATM card/credit card issuers/acquirers and those permitted under FEMA, 1999.
Those accounts for the purpose of IPO, NFO, FPO, share buyback, dividend payment, issuance of commercial papers, allotment of debentures, gratuity, etc, were also exempted, subject to specific or limited transactions only. Also, the accounts of White Label ATM Operators and their agents for sourcing of currency have been exempted.
However, the regulator cautioned the banks that the permission is subject to the condition that the banks shall ensure that these accounts are used for specified transactions only and flag these accounts in the CBS for easy monitoring.
The RBI even ordered the banks to monitor all current accounts and cash credit (CC)/overdraft (OD) regularly, at least on a half-yearly basis to ensure compliance with instructions contained in circular dated August 6, 2020.
In the August 6 circular, the RBI had barred banks from opening current accounts for customers who have availed credit facilities in the form of CC and ODs from the banking system. It had directed that borrowers with more than Rs 50 crore exposure to the banking system need to have an escrow mechanism, while borrowers or firms with over Rs 50 crore exposure to the banking system will have fewer restrictions.