The Reserve Bank of India (RBI) has proposed sterner rules on opening and running of current accounts of corporate borrowers, a move to tackle fund diversion.
As per a senior banker, “RBI suspects that many corp-orates run collection accounts (which are used for holding sale proceeds and other receipts) with other banks so that the consortium leader cannot impound the fund or push the borrower to fork out interest on loans. This is particularly true for stressed accounts…”
Banks having collection accounts will have to transfer funds at the end of the day to the current account with the consortium leader. Current accounts, according to a draft circular shared by the regulator with the banking industry, can “only be opened” with the lead bank in a lending consortium.
The draft circular further suggests that while customers (with Rs 5-50 crore credit) may open current accounts with any lending bank (which is not a consortium leader), only collection accounts can be run with non-lending banks.