RBI vide Notification no. RBI/2021-22/77 dated 4th August, 2021 has issued instructions in order to enforce credit discipline amongst the borrowers as well as to facilitate better monitoring by the lenders.
i. In case of borrowers who have not availed of CC/OD facility from any bank, there is no restriction on opening of current accounts by any bank if exposure of the banking system to such borrowers is less than ₹5 crore.
ii. In case of borrowers who have not availed of CC/OD facility from any bank and the exposure of the banking system is ₹5 crore or more but less than ₹50 crore, there is no restriction on lending banks to such borrowers from opening a current account. Even non-lending banks can open current accounts for such borrowers though only for collection purposes.
iii. The restriction applies to borrowers in case they avail the CC/OD facility
since all operations that can be carried out from a current account can also be carried out from a CC/OD account.
iv. Banks will be permitted time till October 31, 2021 to implement the provisions of the circular.
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12137&Mode=0