RBI Lifts Restrictions on Cash Credit Facilities

The Reserve Bank of India (RBI) has eased restrictions on cash credit facilities after feedback from stakeholders. The central bank acknowledged the need to ensure working capital availability and revised draft norms that previously suggested curbs on borrowers exceeding ₹10 crore across the banking system.

The Reserve Bank of India (RBI) has announced a relaxation of restrictions on cash credit facilities, following stakeholder feedback on earlier draft norms.

In its statement, the central bank highlighted that cash credit accounts operate differently from current accounts and overdraft accounts, warranting a revision of previous restrictions suggested in the October draft for borrowers with over Rs 10 crore exposure.

While the RBI accepted changes to allow any lending bank with over 10% exposure to maintain transaction accounts, it declined other suggestions on transactional monitoring and compliance.