The Reserve Bank OF India (RBI)  on August 4 allowed time to banks till October 31 to implement changes on the current account front, following reports of small businesses being hit with account freezes in the last few days.

The RBI  said the circular is aimed at enforcing credit discipline amongst the borrowers as well as to facilitate better monitoring by the lenders, but made it clear that a "graded approach" had been prescribed to banks on opening and operating of current accounts and cash credit/overdraft CC/OD facilities. "Banks were required to implement these instructions in a nondisruptive manner while keeping the bonafide business requirements of the borrowers in mind," the RBI said. Over last few days, small businesses complained about freezing of accounts by their banks, as they implemented the slew of circulars on the issue, the last one being on December 14, 2020.

The RBI earlier said it has received requests from the banks for some more time to resolve the operational issues while implementing the circular in letter and spirit for which it is now extending the date of implementation. Banks will be allowed time till October 31, 2021 to implement the provisions of the circular. This extended timeline shall be utilized by banks to engage with their borrowers to arrive at mutually satisfactory resolutions within the ambit of the circular, it said.

Former US Ambassador predicts- 'India to lead the world by 2030, will be ahead in every field'

Int’l Monetary Fund approves largest SDR allocation in history to boost liquidity

Indian economy recovering rapidly, manufacturing industry surges sharply