No current accounts for clients with cash credit, overdraft facilities: RBI

With a view to improve credit discipline, the Reserve Bank on Thursday barred banks from opening current accounts for customers who have availed cash credit or overdraft facilities, stressing that there is a "need for discipline" on this front.

In a notification, the central bank said that rather than opening a new current account, all transactions should be routed through Cash Credit (CC) or OverDraft (OD) account.

However, the RBI did not specify the exact reasons for initiating such a move. It can be noted that in recent instances of fraud like the over Rs 4,000 crore PMC co-operative Bank scam, it