Harassing companies as banks arbitrarily suspend accounts

- Antenna: Vivek Mehta

- Accounts of companies-merchants suspended due to circular not to have more than one current account

Banks are suspending their current accounts without informing companies or traders. Banks are suspending or closing their other accounts as the customers have availed the facility of cash credit or overdraft from a bank due to increasing difficulties of companies and traders. After taking cash credit or overdraft, companies-merchants or industries do not show more transactions in the original account of overdraft or cash credit by making more transactions in the current account of another bank. As a result the bank cannot monitor their financial transactions. So this step has been taken.

The industry complains that if there is no other city or state current account, our financial transactions are in trouble. Without it, the day-to-day operations of their branch office would not be possible. Branch Office Salary, Accounts are also required for branch offices to facilitate daily expenses. Revenue from the branch office in the state may also be delayed if there is no account in that state. So there is no release unless you open more than one current account. But the Reserve Bank has issued a circular stating that all current accounts except those from which cash credit or overdrafts have been taken will have to be closed by those commercial entities. Based on this, banks have started closing or suspending haphazard current accounts. Banks argue that merchants take cash credit from one bank and then take cash credit or overdraft to another bank's current account. This increases the likelihood of one or the other bank defaulting.

The bank's concern in this regard is justified. Yet this attitude of the banks on social media is causing the banks to wash their hands of the fish. Each current account holder claims to be self-assured. 5% of the 100 account holders will probably be convincing and honest. But as a result of the one per cent wrongdoers, the banks are tough on all. Therefore, neither the banks nor the Reserve Bank want to allow either a cash credit account or a current account. The financial transactions of the company or business firm should be done from the same account from which cash credit or overdraft has been taken from the current account.

The Reserve Bank insists that account holders pay Rs. If they have taken cash credit or overdraft amounting to Rs 50 crore or more, their current account must be done through the same bank's escrow account. Opening a collection account for them is not prohibited. The only condition is that the amount in the collection account will have to be taken or given only through the escrow account. As per the agreement between the bank and the cash creditor on the approximate number of transactions per month or year, the transactions will have to be done through escrow account. The balance in these accounts should not be used as margin money to take credit without funds. In this case they can open another current account. Yes, only transfer or remittance to escrow account from these accounts will be allowed for transactions for eligible amount. Banks which do not provide any other credit to the current account holder will not have to open a current account.

The credit amount of a cash credit borrower with or without funds from a bank is Rs. More than Rs 3 crore and Rs. If it is less than Rs 50 crore, there will be no limit on the number of current account openings in the lending bank. The Reserve Bank insists that non-lending banks can only open collection accounts for such account holders. Which has only Rs. Banks will have to open a current account with a written undertaking from the account holder in case of borrowing up to Rs 3 crore. The customer has to give in writing that he has paid Rs. 3 crore or more credit facility has been taken. Every bank will have to monitor every cash credit or overdraft account regularly. Care must be taken to ensure that the conditions are not violated. At the same time, it will not be allowed to withdraw term loan money through current account. This money should be credited directly to the account of the person providing the goods and services. Cashcredit or overdraft borrower's day-to-day expenses are also covered by C.C. Or O.D. Must be done through account only. The Reserve Bank That this circular has been issued to keep track of OD's money not being diverted for any other purpose. Wakag wants to keep an eye on capital facilities and allocations for loans and cash credits.