NBFCs, HFCs need to have bank accounts across locations to facilitate collections, says FIDC in a letter to IBA

Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) having pan-India geographical presence need to have bank accounts across locations to facilitate collections – both cash as well as cheques, Finance Industry Development Council (FIDC) said in a letter to Indian Banks' Association (IBA).

"Post the RBI circular on current accounts, while it has been our endeavour to shift our collections to the banks which have provided credit facilities to us, there are multiple locations where those banks do not have a presence or are quite far from our branches," FIDC said while referring to new current account rules.

It further outlined several practical difficulties such as the safety of cash, some cost implications, local cheques issues, among others and suggested that IBA should advise banks that the restriction on current accounts is not applicable to NBFCs, as already confirmed by RBI in their guidelines, sofar as they are required for collection.