Opening a current account is a common requirement for businesses, companies, and enterprises that need to conduct a large number of transactions on a regular basis. The current account is specifically designed to facilitate the smooth and hassle-free management of such transactions. While the eligibility criteria to open a current account online or offline may vary depending on the specific bank, there are some general guidelines that are followed across the industry. In this article, we will explore the eligibility criteria for opening a current account in India in detail.
Business registration
One of the primary eligibility criteria for opening a current account in India is that the business must be registered. This means that the business must have a valid registration certificate issued by the relevant government authority. For example, if you are opening a current account for a partnership firm, you must have a partnership deed as proof of registration.
Type of business
Different banks may have different requirements for the type of business that can open a current account. Before opening a current account, it is important to check with the bank whether your type of business is eligible.
Business turnover
The business turnover is a key factor that banks consider while evaluating the eligibility of a business for a current account. Generally, banks require a minimum turnover of Rs. 1 crore to Rs. 5 crore per annum to be eligible for a current account. However, the exact turnover requirement may vary depending on the bank.
KYC documents
Know Your Customer (KYC) documents are mandatory for opening a current account in India. The KYC documents typically include proof of identity, proof of address, and proof of business registration. Some banks may also require additional documents such as financial statements, tax registration documents, and business licenses.
Credit score
Banks may also check the credit score of the business before approving the opening of a current account. A good credit score indicates that the business has a good credit history and is likely to be a responsible borrower. Banks may offer better terms and conditions to businesses with a good credit score.
Minimum balance requirement
Most banks require a minimum balance to be maintained in the current account at all times. The minimum balance requirement may vary depending on the bank and the type of current account. For example, some banks may require a minimum balance of Rs. 25,000 for a regular current account, while others may require a minimum balance of Rs. 1 lakh or more.
Transaction volume
The transaction volume is another important factor that banks consider while evaluating the eligibility of a business for a current account. The transaction volume refers to the number of transactions that the business is likely to conduct on a regular basis. Banks may offer different types of current accounts depending on the transaction volume, such as a low transaction volume account or a high transaction volume account.
Purpose of the account
The purpose of the current account is also an important factor that banks consider while evaluating the eligibility of a business for a current account. For example, if the business requires a current account to conduct international transactions, the bank may have additional eligibility criteria such as a minimum export turnover requirement.
Other requirements
Some banks may have additional requirements for opening a current account, such as a letter of recommendation from an existing customer, a reference from a business partner, or a personal visit to the bank by the business owner.
In conclusion, opening a current account in India requires the business to meet several eligibility criteria. These include business registration, type of business, business turnover, KYC documents, credit score, minimum balance requirement, transaction volume, purpose of the account, and other requirements.