According to RBI guidelines, banks are required to put in place an escrow mechanism for borrowers whose aggregate exposure in the banking system is equal to or above which amount?

Correct option is C

As per RBI’s current account and cash credit/overdraft regulations, if a borrower’s total exposure across the banking system is ₹50 crore or more, banks must establish an escrow mechanism.

• Only the escrow-managing bank can open or maintain the current account of such borrowers.

• Lending banks may open collection accounts, but funds from these must be periodically transferred to the escrow account.

• Non-lending banks are not permitted to open current accounts for such borrowers.

This mechanism ensures transparency in fund flow, prevents fund diversion, and strengthens credit discipline.