The tightening of current account regulations has been introduced as a proactive measure to enhance credit discipline and reduce the potential misuse of overdraft privileges. Under the new framework, stricter balance monitoring norms and reduced interest-free periods are being implemented to dissuade excessive withdrawals and ensure that borrowers maintain healthier liquidity buffers. The updated guidelines are set to create a more structured borrowing environment, ensuring that credit facilities linked to current accounts are used responsibly.

Institutions are now required to conduct rigorous periodic reviews of current account usage, identifying patterns such as frequent overdrafts or sustained negative balances. Accounts that consistently exhibit high-risk behaviour may face further restrictions or conversion to more tightly governed lending products. By enforcing tiered penalties and interest recalibrations, regulators aim to deter the casual or unchecked use of credit, while reinforcing the banks’ ability to manage risk exposure effectively.

For businesses and individuals, these changes mean a shift toward greater accountability and responsible cash management. Account holders are encouraged to forecast liquidity needs accurately, maintain adequate balances, and consider alternative financing solutions if recurring credit usage is anticipated. Overall, the regulation overhaul signals a commitment to financial stability, encouraging prudent borrowing practices and ensuring that current account facilities support genuine operational requirements rather than serving as a default credit line.