Millions of current accounts closed by banks on RBI directives

Following the instructions of the Reserve Bank of India (RBI), the banks raised millions Current accounts closed Are Millions of MSMEs across the country are facing difficulties due to the bank’s decision.

However, the decision did not have much impact on large companies as they have accounts in many banks. Importantly, to curb the diversification of funds, the Reserve Bank of India had taken some security measures in August last year to allow banks to open current accounts. Broadly speaking, these rules state that banks cannot open current accounts for borrowers where their exposure is less than 10 percent of the borrower’s total exposure to the banking system.

The RBI had earlier asked the banks to comply with the circular within three months, but the regulator extended the deadline till July 31 after the banks failed to comply. Now, from August 1, banks have started closing or freezing accounts to comply with RBI rules. Most of the current account holders are businessmen and entrepreneurs.

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