The Reserve Bank of India (RBI) has announced major changes to current account rules, which will come into effect from April 1, 2026.
The new framework aims to track fund movement between banks more closely, prevent circular or fraudulent transactions, and improve credit discipline.
For companies borrowing from multiple banks, managing daily cash flows will now require more planning.
Big Relief for Borrowers with Loans Below ₹10 Crore
The RBI has offered significant relief to small and medium businesses.
Companies whose total borrowing from the banking system is less than ₹10 crore will not face any new restrictions.
They can continue to open and operate current accounts with any bank, just like before.
There will be no additional monitoring, fund transfer deadlines, or compliance pressure.
he RBI has clearly stated that strict rules for small borrowers could affect business growth, which is why they have been kept outside this framework.
Strict Rules for Borrowings of ₹10 Crore or More
For companies with total loan exposure of ₹10 crore or above, the rules are much stricter.
Only banks that hold at least 10 percent of a company’s total loan exposure will be allowed to operate a full current account.
Banks with less than a 10 percent share can open only a collection account.
Money can be deposited into a collection account, but withdrawals are not allowed.
There will be no cheque book, debit card, cash withdrawal, or online transfer facility.
All funds received must be transferred to the main current account or CC/OD account within two working days.
Monitoring, Exemptions, and Penalties
The RBI has clarified that accounts required under FEMA, government orders, or other legal directions will be exempt from these rules.
Banks that are not eligible to run full current accounts may still open limited-purpose receiving accounts for certain products. However, these accounts will be closely monitored.
Banks must review such accounts every six months.
If any violation is found, a notice must be issued within one month, and the account must be closed or converted into a collection account within three months.
What This Means for Businesses
While these rules are stricter for large borrowers, they are designed to make the banking system more transparent, secure, and disciplined.
Companies with high borrowings will need better coordination with their lenders, while small businesses can continue operating without additional burden.
