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of <h1>RBI Updates Rules: Banks Restricted from Opening Current Accounts for Overdraft Clients, Mandates Quarterly Compliance Checks.</h1> The Reserve Bank of India has revised guidelines for banks opening current accounts. Banks cannot open current accounts for customers with existing cash credit or overdraft facilities; transactions must go through these accounts. If a bank's exposure to a borrower is less than 10% of the total banking system's exposure, debits can only transfer to a bank with 10% or more exposure. For borrowers with no credit facilities, banks can open current accounts based on specific exposure thresholds, with escrow mechanisms for exposures of Rs. 50 crore or more. Banks must monitor accounts quarterly to ensure compliance, and term loan drawals should not be routed through current accounts. Existing accounts must comply within three months.
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