Guidelines – Opening of Current Accounts With Bank

Current Account opening Process & Guidelines with Banks – Know the Bank’s guidelines and process of Opening Current Account with Banks. The Reserve Bank of India guidelines and other important details.

What is Current Account ?

Current account are non interest-bearing bank account for business transactions. Customers can open current accounts with any banks for general business purposes. They can deposit/withdraw money at any time from such accounts. There are no restrictions on withdrawals in this type of account. No interest is paid on this type of account. 

Opening of Current Account – RBI Guidelines : –

Each banks has to follow the RBI guidelines while opening current account for customer. The latest guidelines on current account opening by RBI.

Declaration by Customer or No Objection Certificate 

Reserve Bank of India has mandate the banks to collect the declaration from the customer to the effect that he/she/others is not enjoying any credit facility with any other bank. Banks should 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 from the lending bank(s).

Violations if any must be reported to RBI or noticed during RBI inspection would make the concerned banks liable for penalty under Banking Regulation Act, 1949.

Guidelines on Opening Current Account Incase NOC not received 

Incase no response is received from the existing bankers after a minimum waiting period of a fortnight, Banks may open current accounts of prospective customers.

If a response is received within a fortnight, banks should assess the situation with reference to information provided on the prospective customer by the bank concerned and are not required to solicit a formal no objection, consistent with true freedom to the customer of banks as well as needed due diligence on the customer by the bank.

In case of a prospective customer who is a corporate or large borrower enjoying credit facilities from more than one bank, the banks should exercise due diligence and inform the consortium leader, if under consortium, and the concerned banks, if under multiple banking arrangement.

How Many Current Accounts can be opened by a Bank for single firm ?

There is no restrictions on number of accounts opened with banks unless the customer is having running working capital limits or Overdraft from other banks. No Objection Certificate (NOC) needed from lending banks for opening Current Account.

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