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JC - Legal Updates - Banks to implement current account notification in a non-disruptive manner - RBI provides relief to borrowers!

Legal Updates

05 Aug 2021

Banks to implement current account notification in a non-disruptive manner - RBI provides relief to borrowers!

The Reserve Bank of India (“RBI”) has, vide its notification dated 4th August 2021 titled ‘Guidelines for Implementation of the circular on Opening of Current Accounts by Banks’ (“Latest Notification”), issued guidelines to banks for the implementation of its circulars dated 6th August 2020, 2nd November 2020, and 14th December 2020 in relation to opening and operating of current accounts by borrowers (collectively the “Original Notification”).

The RBI has stated that the contents of the Original Notification should be implemented by banks in a non-disruptive manner and without causing undue inconvenience to their borrowers.

Some of the key features of the Latest Notification are as follows:

1)   The deadline for implementation of the Original Notification has been extended from 31st July 2021 to 31st October 2021. This extended period shall be utilised by the banks to engage with their borrowers and mutually reach at a resolution for implementation of the Original Notification.

2)   Where banks are unable to resolve issues, the same is required to be escalated to the Indian Banks’ Association (“IBA”) for guidance. IBA is required to flag any issues requiring consideration to the RBI by 30th September 2021.

3)   Banks are required to put in place a monitoring system across its head office and regional / zonal office levels to: (a) supervise a non-disruptive implementation of the Original Notification, and (b) to ensure that the customers are not inconvenienced during the implementation process.

4)   Cash-in-Transit (CIT) Companies / Cash Replenishment Agencies (CRAs) are exempted from the applicability of the RBI circular dated 6th August 2020 pertaining to opening of current account.

https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NT772E1C67FC392A45A8B41FAAEEB3EBC847.PDF

For any further information, please contact Mr. Ankit Sinha (ankit.sinha@jclex.com), Mr. Saurabh Sharma (saurabh.sharma@jclex.com) or Ms.Teza Jose (teza.jose@jclex.com).