NO SAVINGS BANK ACCOUNTS FOR THE GOVERNMENTS : RBI

Dated 18.10.2023 :  All banks are  expected to follow KYC rules set by Reserve Bank of India   before opening a customer account with them or during the maintenance of the account .  RBI had issued one such Master Direction on 25.02.2016 .  Subsequently RBI has made various  amendments to its instruction   . Once again on 17th October 2023 , RBI has made fresh amendments   .  
The amendments are as follows : 

(a) Update certain instructions considering amendments to the PML Rules vide Government notifications dated September 4, 2023 and October 17, 2023;
(b) Update Annex II of the MD considering the changes to Government of India Order related to Unlawful Activities (Prevention) Act (UAPA), 1967, vide corrigendum dated August 29, 2023;
(c) Update Annex III of the MD by replacing the Government of India Order dated January 30, 2023, related to Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 (WMD Act, 2005) with the Government of India Order dated September 1, 2023 (which has been issued by the Government in suppression of the earlier WMD Act Order dated January 30, 2023), on the matter;

(d) Update certain instructions in accordance with the FATF Recommendations;
(e) Add a new Section 55A, on FCRA, in the MD on KYC; and
(f) Update certain other instructions post review.
The changes carried out in the MD in this regard are provided in Annexure.
Now amending those instruction  , RBI has issued fresh  direction and the Amended  direction  is to be followed by the banks .  
NO SAVINGS BANK ACCOUNTS FOR THE GOVERNMENTS : RBI 

Reserve Bank of India ( RBI )  made it clear now that no bank ,including   co-operative banks  , can open a  Savings Bank Account (  SB )     in the name of Government departments / bodies depending upon budgetary allocations for performance of their functions / Municipal Corporations or Municipal Committees / Panchayat Samitis / State Housing Boards / Water and Sewerage / Drainage Boards / State Text Book Publishing Corporations / Societies / Metropolitan Development Authority / State / District Level Housing Co-operative Societies, etc. or any political party or any trading/business or professional concern, whether such concern is a proprietary or a partnership firm or a company or an association and entities other than individuals, Karta of HUF, and organisations / agencies approved by the RBI .