Exemptions broadened for banks to open current, cash credit and overdraft accounts

The Reserve Bank of India, through its circular on “opening of current accounts and Cash credit/ overdraft accounts” , has broadened the scope of exemptions by allowing the banks to operate inter-bank accounts and accounts of All India Financial Institutions (AIFIs).

The Reserve Bank has also exempted accounts under the scrutiny by order of the Central/ State government, courts, regulatory bodies and investigating agencies. In such cases, the customer won’t be able to take discretionary debits. The Consolidated circular has mentioned four AIFIs: EXIM, NABARD, NHB and SIDBI.