<h1>Banks Must Follow RBI Guidelines for Overdrafts: Policies Include Borrower Limits, Documentation, and Pricing Under Banking Regulation Act, 1949.</h1> Overdraft facilities provided by banks are regulated by their Board-approved credit policies, adhering to the Reserve Bank of India's guidelines under the Banking Regulation Act, 1949. The RBI has instructed banks to establish comprehensive loan policies, covering aspects like borrower exposure limits, documentation standards, security, sectoral exposure limits, delegation of powers, and pricing policies. Banks evaluate loan proposals based on commercial judgment and policy guidelines. This information was disclosed by a government official in a written response to a parliamentary question.