Latest News | Intermediaries Can Maintain Current Accounts in Appropriate Number of Banks: Irdai

Mumbai, Dec 29 (PTI) Regulator Irdai on Wednesday said insurance intermediaries, including entities sponsored by them, can maintain current accounts in appropriate number of banks for the purpose of meeting regulatory requirements and reinsurance business.

In August 2020, the Reserve Bank of India (RBI) had instructed banks not to open current accounts for customers who have availed credit facilities in the form of cash credit or overdraft from the banking system.

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Later, on a review, the RBI permitted banks to open specific accounts that are stipulated under various statutes and instructions of other regulators/ regulatory departments, without any restrictions placed in terms of its August 2020 circular.

In a circular, the Insurance Regulatory and Development Authority of India (Irdai) said it has been observed that the insurance intermediaries maintain multiple current accounts with banks at different operational levels (branch offices, and corporate offices, among others), for regulatory and other purposes.

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"...it is clarified that the respective insurance intermediaries including entities sponsored by them may maintain current accounts in appropriate number of banks for the purpose of meeting regulatory requirements, reinsurance business, etc that are in line with conditions given in regulations, guidelines, circulars issued by the Authority," Irdai said.

The regulator had received representations from the intermediaries in regards to maintaining current accounts with banks. The ciruclar has been issued to avoid hardships, if any, faced by the insurance intermediaries.

Irdai, however, asked the insurance intermediaries to review annually the need for having multiple current accounts and rationalisation. HRS hrs

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)