RBI's curb on current account use may hit private banks in the short term

Move can also bring a huge change in the way business is done in India, where firms use multiple current accounts, often for even individual projects, making them difficult to monitor

The Reserve Bank of India’s (RBI) recent move to restrict indiscriminate use of multiple current and cash credit accounts will likely make it quite difficult for private and foreign banks to compete with public sector peers in mobilising low cost deposits.

Besides, it can also bring a generational change in how businesses are conducted in India, where companies use multiple current accounts, often for even individual projects, which are very difficult to monitor on a granular level. say bankers and analysts.

As part of its monetary policy on August 6, the central bank said no bank can open current account