The Reserve Bank of India (RBI) has introduced stricter regulations for opening and operating current accounts.
The goal is to prevent fund diversion by borrowers and ensure more discipline in the banking system.
These new rules will come into effect on April 1, 2026.
Customers with a total debt of less than ₹10 lakh will not be affected and can continue opening current accounts as usual.
Key Changes for High-Loan Customers
For borrowers with loans above ₹10 crore, only banks holding at least 10% of the total loan can open a current account or cash credit/overdraft (CC/OD) account.
Banks with less than 10% share can only open a collection account.
This type of account can receive money but cannot be used to withdraw or spend funds.
Money in collection accounts must be transferred to the main account or escrow account within two days.
RBI has strictly prohibited money routing through third-party accounts, meaning funds must go directly to the intended bank account.
What Collection Accounts Can and Cannot Do
Deposit only: Funds can be credited but cannot be withdrawn.
Transfer timeline: Money must be moved to the main account within two days.
No facilities: Cash withdrawals, cheque books, and debit cards are not allowed.
This ensures that banks with lower stakes cannot manipulate funds or provide services that could facilitate diversion of money.
Regular Audits and Compliance
Banks are now required to audit accounts every six months to check for violations.
If an account is found to violate the rules, the bank must:
Issue a one-month notice to the customer.
Close or convert the account into a collection account within three months.
Flag such accounts in the core banking system to prevent misuse.
These measures aim to create a transparent and disciplined current account system while protecting banks and borrowers from potential financial risks.
