The Reserve Bank of India (RBI) has set some new conditions for the banks to open new current accounts for large borrowers with a view to enhancing credit discipline.
These conditions are for customers who have availed cash credit or overdraft facilities.
Read on to find out more about the new conditions and the reason behind the move…
RBI’s Step Towards Secure Banking!
The RBI governor, Shaktikanta Das in a statement on Developmental and Regulatory Policies on August 6 said that multiple operating accounts used by large borrowers- both current and cash/overdraft accounts- have been observed to be prone to violate the credit discipline.
In a notification, the RBI said that rather than opening a new current account, all transactions should be made through a cash credit (CC) or overdraft (OD) account.
This move will avoid hoodwinking the system and reduce the blind spots thus protecting the depositor’s money, said the officials with knowledge in the matter.
The central bank also said that the revised norms will likely bring in the requisite discipline in collective actions by creditors for speedier resolution of stress in the accounts of borrowers.
It added, “Banks should not route withdrawal from term loans through current accounts. Since term loans are meant for specific purposes, the funds should be remitted directly to the supplier of goods and services. Expenses incurred by the borrower for day to day operations should be routed through CC/ OD account if the borrower has CC/ OD account, else through a current account.”
The Reason Behind This Move?
The RBI hasn’t stated the reason behind this move. However, it can be linked to the Rs 4000 crore PMC cooperative bank scam wherein multiple accounts were opened.
A customer can open multiple accounts there is no monitoring of funds. Also, the same customer can withdraw a huge amount from the same bank from different accounts, which can possibly lead to fraud cases and scams.
The customer can take part in a vicious circle, wherein he uses the money to pay the first credit facility which can lead to a wider concern.
The policy is surely a step towards preventing huge bank scams we have witnessed in the past years!
An Earthquake of Magnitude 4.9 felt in Nepal, India and China
An earthquake of Magnitude 4.9 hit Nepal, India, and China at around 03.00 pm IST. Tremors were felt in Nepal with light tremors in some cities like Muzaffarpur, Hajipur, and Patna in the Indian state of Bihar.
The epicenter is said to be 10 km from Phulpingkatti in Nepal. More updates are awaited.
London Bridge Down: Death of Queen Elizabeth brings a moment of reckoning for Britain
LONDON: Queen Elizabeth II has died in Scotland aged 96 after battling health problems since last October, the Royal Family announced Thursday. Doctors had placed the queen under medical supervision at Balmoral Castle, her estate in the Scottish Highlands.
Buckingham Palace has just released the following statement: “The Queen died peacefully at Balmoral this afternoon. The King and The Queen Consort will remain at Balmoral this evening and will return to London tomorrow.”
Her close family rushed to her bedside as doctors grew “concerned” about her health on Thursday, Buckingham Palace said. Her grandson and his wife, Harry and Meghan Markle – who had a public showdown with the Palace, flew in from Canada.
According to news agency AFP, the Queen pulled out of a planned meeting with her senior political advisors on Wednesday, after being told to rest. The previous day she had audiences at Balmoral – her Scottish Highlands retreat, with outgoing Prime Minister Boris Johnson and appointed his successor, Liz Truss.
In recent months, the Queen appeared visibly frail and had a series of withdrawals from public engagements. She had taken to walking with a stick and was also seen touring the Chelsea Flower Show in a motorized buggy.
In June, the UK came together for the Platinum Jubilee celebrations to mark the 70th anniversary of the Queen’s accession to the British throne. Her husband, Prince Phillip, died last year at the age of 99, two months before his 100th birthday.
Queen Elizabeth II’s tenure as head of state spanned post-war austerity, the transition from empire to Commonwealth, the end of the Cold War and the UK’s entry into – and withdrawal from – the European Union.
Her reign spanned 15 prime ministers starting with Winston Churchill, born in 1874, and including Liz Truss, born 101 years later in 1975, and appointed by the Queen earlier this week. She held weekly audiences with her prime minister throughout her reign.
Bharat Ratna awardee and true gem Lata Mangeshkar Ji is no more
The nightingale of the music industry, Lata Mangeshkar Ji passed away on February 6 at the age of 92 in the Breach Candy Hospital in Mumbai. She was born on September 29, 1929. Very few singers have achieved the admiration that she did in her life.
She sang thousands of songs in more than 20 different languages. Not only in India, Bangladesh, Nepal, and Pakistan, she was also admired and praised in western countries.
PM Modi was among the first ones to share the sad news. “The kind and caring Lata Didi has left us. She leaves a void in our nation that cannot be filled. The coming generations will remember her as a stalwart of Indian culture, whose melodious voice had an unparalleled ability to mesmerise people,” he tweeted.
Apart from Bharat Ratna, she received numerous honors like the Daughter of the Nation award, the Legion of Honour award from the French government, and many more. Lata Mangeshkar truly was a gift that India will never cease cherishing.
We at Giveupnot pay our heartly tributes to her and wish that “unki aatma ko sadgati prapt ho”, OM SHANTI.