- The draft norms, which were issued on October 1, covered transaction account operations across seven categories of regulated entities, including Commercial Banks (CB), Small Finance Banks (SFB), Payments Banks (PB), Local Area Banks (LAB), Regional Rural Banks (RRBs) and Co-operative Banks.
- What? RBI issued transaction account directions
- Entities covered: CB, SFB, PB, LAB, RRB and Co-operative bank
- Effective from: April 1, 2026
- CC Account: No restrictions in providing one
- CA&OD Account:
- Exposure < Rs 10 Cr: No restriction
- Exposure >= Rs 10 Cr: Only if bank hold at least 10% of total or fund-based system exposure
- Exposure < Rs 10 Cr: No restriction
- Exposure >= Rs 10 Cr: Only if bank hold at least 10% of total or fund-based system exposure
Key Highlights
Cash Credit (CC) Account Exclusion: The RBI acknowledged that CC facilities function differently from current and overdraft accounts as it is mainly a working-capital facility tied to the value of the borrower’s current assets.
- Therefore, the Banks can now provide such CC facilities as per the needs of the customer, without any restriction.
Effective from: The amendments shall come into force from April 1,2026. Banks may however decide to implement the amendments in entirety from an earlier date.
Current Account (CA) and Over Draft (OD) Account
Exposure less than Rs 10 Crores (Cr): A bank may maintain a CA or OD account without any restriction in case of customers where the aggregate exposure of the banking system to the customer is less than Rs 10 Cr.
Exposure more than Rs 10 Cr: A bank may maintain current accounts or OD accounts as per the needs of the customer provided that the bank has either:
- A minimum 10% share in banking system’s aggregate exposure to the borrower; or
- A minimum 10% share in the banking system’s aggregate fund-based exposure to the borrower.
Other Key Highlights
Remittance Window: Despite stakeholders request for a longer remittance window, the requirement to transfer funds from collection account to designated transaction accounts (CC/OD/CA) within two working days remains unchanged.
About the Reserve Bank of India (RBI):
Governor – Sanjay Malhotra
Headquarters – Mumbai, Maharashtra
Established – 1st April, 1935
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