Owners of small businesses seek FM Nirmala Sithraman’s intervention regarding new RBI current account rules

As the new RBI’s current account rules come into force from July 31, 2021, the small businessmen seek Union Finance Minister Nirmala Sitharaman’s intervention to get some relief regarding the same.

The accounts of public and private sector banks of small businessmen are suddenly being closed, on the back of Reserve Bank of India’s new current account rules implementation from tomorrow.

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According to the RBI circular, borrowers over Rs 5 crore are barred from opening a current account in any bank and no such facility of the current account will be provided to these borrowers.

Zee Business Principal Correspondent Anurag Shah's report mentions that the small businessmen in the transport sector are already facing payment-related problems due to the new rules.

As many as 10 per cent of the total loan required for a current account with the bank, the central bank mentioned in a circular, Share reported.

According to the central bank’s rules, “Banks which gave loans up to Rs 5-50 crore, will be termed as current account, such debtors can only open collection accounts with other banks, and won’t be considered as current accounts. The collection account amount will go to the cash credit account.”

The central bank aims to increase strictness to bring discipline among debtors in order to stringent current account rules. The current account/Cash Credit/Over Draft facility will now be available only with borrowed banks. This rule is applicable in the case when the loan is more than Rs 5 crore.

These rules are brought into action with an intention to monitor the money banks are lending to, the RBI mentions in the circular. It also pointed out that there would chance of shifting current account loans to private from government banks.

The new RBI rules regarding the current account also suggest that the private banks benefited from cheap current account money and banks only with over 10 per cent exposure will be able to open cash credit and overdraft facilities.