RBI relaxes transaction account norms for banks

THE RESERVE BANK of India (RBI) on Thursday released the final guidelines on transaction account directions and introduced key relaxations while maintaining the overall principle-based framework, easing bank norms related to opening and maintenance of cash credit, current and overdraft accounts.

- FE BUREAU

The guidelines will come into effect from April 1. However, banks can implement these guidelines from an earlier date, the release said.

The draft norms, which were issued on October 1, covered transaction account operations across seven categories of regulated entities, including commercial banks, small finance banks, payments banks and cooperative banks.

One of the most notable changes in the final guidelines is the removal of restrictions on cash credit (CC) accounts. Banks had argued that limiting such accounts could hinder working capital flows to busi-

Internal systems and processes must be robust enough to ensure compliance, the central bank said