RBI bars banks from opening current accounts for customers having availed cash credit or overdraft facilities

The Reserve Bank of India has barred banks from opening current accounts for customers who have availed cash credit or overdraft facilities, with a view to improve credit discipline.

In a notification, the Central Bank said, rather than opening a new current account, all transactions should be routed through a Cash Credit or OverDraft account. The RBI stated that there is a need for discipline by the banks in



opening current accounts.  

RBI Governor Shaktikanta Das said it is necessary to take appropriate measures for strengthening credit discipline. He said there are concerns emanating from the use of multiple accounts by borrowers which calls for the need to safeguard for opening of such accounts by borrowers, availing credit facilities from multiple banks.