RBI-Opening of Current Accounts by Banks - Need for Discipline
July, 04th 2015
July 02, 2015
The Chairman / Chief Executive All Scheduled Commercial Banks (excluding RRBs)
Opening of Current Accounts by Banks - Need for Discipline
Please refer to our circular DBOD.No.Leg.BC.84/09.07.005/2003-04 dated May 15, 2004 advising banks to scrupulously ensure that their branches do not open current accounts of entities which enjoy credit facilities (fund based or non-fund based) from the banking system without specifically obtaining a No-Objection Certificate (NOC) from the lending bank(s). Further, vide circular DBOD.No.Leg.BC.22/09.07.005/2004-2005 dated August 4, 2004, banks may open current accounts of prospective customers in case no response is received from the existing bankers after a minimum waiting period of a fortnight. However, we have been receiving complaints against banks for opening current account without following due diligence as specified in our aforesaid circulars.
3. Keeping in view the importance of credit discipline, especially for reduction in NPA level in banks, banks are advised to make use of the information available in CRILC and not limit their due diligence to seeking NOC from the bank with whom the customer is supposed to be enjoying the credit facilities as per his declaration. Banks should verify from the data available in CRILC database whether the customer is availing of credit facility from another bank. Further banks may also seek ‘No Objection Certificate’ from the drawee bank where the initial deposit to current account is made by way of a cheque.
4. As these instructions are aimed at improving credit discipline, appropriate penal action will be taken in case of non-compliance.