IBPS PO Mains 12 Oct 2025 Shift 1 Paper

Concept:RBI mandates an escrow mechanism for large borrowers to ensure credit discipline and prevent diversion of funds.Explanation:As per the RBI circular on 'Opening of Current Accounts by Banks - Need for Discipline', a mandatory escrow mechanism applies when a borrower's aggregate credit facility from the banking system is $\text{Rs.}50$ crore or more.The escrow account must be maintained by one of the lending banks, and all cash inflows and outflows of the borrower must be routed exclusively through this account.Only the bank maintaining the escrow account is allowed to open a current account for such borrowers.Other lending banks may open collection accounts, provided funds are periodically transferred to the escrow account.Aggregate exposure includes both fund-based facilities (term loans, cash credit, overdraft) and non-fund-based facilities (letters of credit, bank guarantees).For borrowers with exposure below $\text{Rs.}50$ crore, no mandatory escrow is required, but only lending banks can open current accounts.Answer:$\text{Rs.}50$ crore (Option C)