As per the existing RBI guidelines, the banks cannot open the current account of prospective customers without obtaining a ‘No-objection letter’ from the lending banks and in case no response is received from the existing bankers after a minimum waiting period of a fortnight.
The Reserve Bank of India in their notification informed that they have been receiving the number of complaints against banks that proper due diligence was not followed by some branches of the banks for opening current accounts. In this connection, banking regulator advised all the banks to make use of information available from Central Repository of Information on Large Credits (CRILC) which collects stores and disseminates data on all large borrowers’ credit exposures to and from Banks/Financial Institutions. Taking note of the situation especially of increasing NPAs in the banking sector, the Central Bank instructed all the banks to scrupulously follow the following due diligence instructions.
In addition to seeking NOC from the bank, where the customer is enjoying facilities on the basis of customer’s declaration, banks are required to seek information from CRILC. Banks should verify the data received from the CRILC, whether the prospective customer is enjoying credit facilities from another bank. Also, banks have to seek ‘No Objection certificate’ from the drawee bank where the initial deposit to current account is made by way of a cheque.
In addition to above, for current accounts of individuals,proprietorship A/c,Company A/C,Partnership A/C, trust A/cs, Association A/cs, societies A/cs, club A/css, Local Authorities and Government Departments A/cs different sets of documents are required. For documents required for various categories of accounts click ‘Documents”.
Reserve Bank has warned that it would take appropriate penal action against the banks in case of non-compliance of above instructions.