The Reserve Bank of India (RBI) on Thursday announced the easing of restrictions on cash credit (CC) facilities, following extensive feedback from stakeholders on its draft guidelines issued earlier in October. The draft had recommended restrictions on borrowers with exposure of over ₹10 crore across the banking system, raising concerns among industry participants.

In its latest statement, the central bank clarified that cash credit accounts function differently from current and overdraft accounts, and therefore the proposed restrictions would not be appropriate. “It has been decided to remove the restrictions on cash credit facilities as these accounts are operationally different from current accounts and overdraft accounts,” the RBI noted.

The move is expected to offer relief to businesses that rely heavily on cash credit limits for managing working capital. Industry experts say the decision reflects the RBI’s responsiveness to stakeholder inputs and ensures smoother credit access for companies without adding operational hurdles.