Opening of current account RBI Circular dated 6 Aug 2020

Save Share

This query is : Resolved

Quick Summary

Following an RBI circular from August 6, 2020, banks are advising some customers to close their current accounts if they also hold a Cash Credit (CC) facility. The circular aims to ensure all transactions are routed through the working capital account for better tracking. If both your current and CC accounts are with the same bank, you may be able to submit a request to continue operating your current account, provided the reason is genuine. However, if the accounts are with different banks, closing the current account is generally required.

Amit purohit

Amit purohit (Querist)
Follow

05 January 2021 Dear Sir

We have current account + CC in nationalised bank. Our bank is know saying to close current account because of Circular dated 6 aug 2020 RBI.

What steps we can take to ensure that current account is not closed.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

10 January 2021 First ensure that you have both Current and CC accounts with the same bank. if it's so, the process is to submit a request letter to your Bank seeking permission to continue the current account. If the reason is genuine, banks do allow you to continue operate current account

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

10 January 2021 If the accounts are maintained in separate banks, then your Bank is correct. You can only operate your CC account and the current account has to be closed. Exceptions are unlikely

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

10 January 2021 The intention behind the RBI circular is that the businesses,that have availed Cash credit or other working capital credit facilities, should route all the transactions through their Cash credit /working capital account only. If businesses continue to maintain separate accounts, tracking the same will be tough.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

10 January 2021 Being a banker, my one cent of advice: Either close the current account or surrender the credit facilities.

Amit purohit

Amit purohit (Querist)
Follow

11 January 2021 ok thanks for reply........

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now