The Insurance Regulatory and Development Authority of India on 5th October 2021 has allowed the insurers to maintain current accounts in appropriate number of banks for the purpose of premium collection, management expenses, policy payments, investment operations, etc., for the convenience of the policyholders and for the ease of doing business.
RBI in its earlier circular dated August 2020 had instructed banks not to open current accounts for customers who have availed of credit facilities in the form of cash credit (CC) / overdraft (OD) from the banking system and on the review made on 14th December 2021 RBI has permitted banks to open specific accounts which are stipulated under various statutes and instructions of other regulators/regulatory departments, without any restrictions.
However based on the requests received by the Authority, to avoid hardships, if any, faced by the insurers in maintaining current accounts with banks, it is clarified that the respective insurers may maintain current accounts in appropriate number of banks for the purpose of premium collection, management expenses, policy payments, investment operations, etc., for the convenience of the policyholders and for the ease of doing business.
