2. Introduction
It is a deposit account that can be taken in the bank by filling a bank accounts application.
It is used for the convenience of withdrawing or depositing funds. Banks in India generally
offer these bank accounts for business ventures and operations.
The level of competition amongst businesses has skyrocketed over the last decade and
today, it is at a level which only few thought was possible. To grow a business, the
entrepreneur has to regularly update all their business needs and goals with the help of
money. A current account gives you better options to send and receive funds instantly to
almost any part of the country. The current account is also known as demand deposit.
3. What are the uses of a current
account?
Bank accounts make it possible for the applicant to deposit and withdraw funds at any time
for whatever reason the bank account holder may have. There are no interest rates charged
for these types of accounts by banks in India and you can fill the bank accounts application
from any bank and get instant access to your account.
The applicant can only choose certain types of options to deposit the money.
You can directly go to the bank and deposit the funds
If you have a current account, you can send the cheque by post to the bank to deposit
money to your bank account
You can use electronic transfer
Use the debit card to buy any products and services online or from any retail/shopping stores
that have the option to check debit card and process payments.
4. Features
There are many features and benefits that an applicant can avail by applying for a current
account. Some of these are given below:
Banks in India charge no fees for transfers of funds from one account to another
You can pay and collect the money through RTGS (Real Time Gross Settlement) and NEFT
(National Electronic Funds Transfer System)
A certain limit on the demand draft and pay orders per month are applicable
There are no special charges for clearing the cheques in any part of the country
You can withdraw or deposit at any branch of the banks in India
The bank accounts are safe, secure and convenient
You can enjoy all the benefits such as phone banking and net banking and for any queries, you
can contact the customer support representatives of the bank
5. Who Can Open?
This account is opened for business or commercial use.
Normally current account is opened by those who have commercial interest and have need
to issue many cheques.
These include:
Individuals
Sole proprietorships
Hindu undivided family
Partnerships
Trusts associations
Societies and clubs
Limited companies
6. Documents Required
Sole Proprietorship Hindu Undivided Family Partnership Company Trust /Association
Id proof & address proof of the
proprietor Utility bill such as
Telephone/Electricity bill in the
name of the proprietary concern
Id proof & address proof of the
Karta , id of proof of the
coparceners
Deceleration from the Karta
PAN card of the firm/Id or
address proof & photos of the
partners
Id proof of all
directors/authorised signature
PAN card of directors passport,
voter id card
Id proof & address proof of the
founder
Registration certificate,
Certificate license issued by
municipal authorities
Deed of deceleration of HUF
Id proof & address proof of the
person holding POA
Certification of incorporation,
Commencement of business,
Memorandum & Article of
association
Trust deed, registration
certificate
List of trustees with their
signature
Sales tax/central sales tax/value
added tax
Photos of Karta
Partnership deed, partnership
registration certificate
Company pan card or
acknowledgement (less than 90
days)
Power of attorney
Income tax return in the name of
proprietor
Certified board resolution,
of attorney granted to its
manager officers or employee to
transact on its behalf
Telephone Bill
7. Facilities
Overdraft – An overdraft is a facility granted by the bank to a current account holder.
Overdraft is an arrangement between a bank and its customer by which customer is allowed
to withdraw over and above his credit balance in the current account. There is an agreed limit
of overdraft. This is a temporary facility usually provided to the current account holder. The
burrower is permitted to withdraw and repay any number of time up to the sanctioned limit.
Interest is charged only on the amount overdrawn by the burrower. It is an short term facility.
Cash credit – Under this facility a separate cash credit account is opened and the customer
can burrow fund from this account upto a certain limit. The limit is decided depending on the
collateral security that the customer offers to the bank for providing this facility. The bank
charge interest on the amount withdrawn.
Nomination facility - A depositor is permitted to officially authorise someone, who would
receive the money of his account when the depositor passes away. This is called nomination
process. Nomination facility is available to all deposit account opened by individuals.
Nominee is a also available to the sole proprietary concern account.
8. Responsibilities of the current account
holder
There are certain responsibilities that the applicant must have and follow in order to maintain
proper transfers to and from the account:
Make sure to keep all your bank accounts and PIN number from the reach of anyone else
Banks in India issue account statements every month by sending them to your email or
residence address. Collect all the statements and keep them up to date.
Don’t ever sign in the cheque book. If you have any cheques that are not valid destroy them
immediately
Banks in India require you to inform them of any change in the residence address, phone
number, loss of cheque book or cheque
In case of theft or loss of Debit card or credit card, make sure to inform the bank to block
your account
9. Advantage of current account
Current account is mainly opened for businessmen such as proprietors, partnership firms,
public and private companies, trust, association of persons, etc. that has a large number of
daily banking transactions, i.e. receipts and/or payments.
It enables businessmen to carry out their business transactions properly and promptly.
The businessmen can withdraw from their current accounts without any limit.
It helps businessmen to make a direct payment to their creditors by issuing cheques, demand-
drafts or pay-orders, etc.
It enables a bank to collect money on behalf of its customers and credits the same in their
customers' current accounts.
It enables the current account holder to obtain overdraft (short-term borrowing) facility.
It facilitates the industrial progress of the country. Without its help, businessmen would face
difficulties in running their businesses.
It has the facilities of Internet-banking and mobile-banking to carry out important business
transactions with ease and quickly.
10. Disadvantage of current account
There are a couple different disadvantages of using a current account.
One of the disadvantages of a current account includes drawing a low interest rate.
The initial paperwork when opening an account is lengthy and terms are difficult to
understand.
Penalty is charged if minimum balance is not maintained as compared to the savings account
11. Interest on current account
Banks do not pay interest on balances maintained in a current account
The RBI prohibits the payment o f interest in the current account. In addition, RBI also
prohibits the payment of countervailing interest.
Banks are permitted to pay interest on the current account of a regional rural bank they
have sponsored.
Since May 1983 banks have been permitted to pay interest on the balances in the
current account standing in the name of deceased individual
12. Dormant Account and charges
If there has been no customer initiated transactions in the account for 2 years, the
account will be designated as the “DORMANT ACCOUNT”
Many banks reduced this period to 6 months. These accounts are subject to greater
check, as they are susceptible to fraud.
Bank often insist on a minimum average monthly/quarterly balance to be
maintained in the account. If the balance is not maintained a service charges is
levied.
Client must be advised of any changes in the charges.
13. Comparison of Bank
Columns ICICI Bank Corporation Bank
Saraswat
Cooperative Bank
Standard Chartered
AMB/AQB ₹ 10,000
₹ 5000 urban&metro ₹ 2500
semi urban
₹ 5000 ₹ 1,00,000
NMMAB/NMQAB ₹ 300 ₹ 250 ₹ 600 ₹ 2000
RTGS Free
50% concession through net
banking
Free Free
INTERNET BANKING Free Free Free Free
SMS Banking Free ₹ 100 Free -
Demand Draft Free
50% concession through net
banking
Free Free
Replacement/ lost/
stolen debit card
₹ 200 ₹ 200 ₹ 99 Free
14. Comparison of Bank
Columns ICICI Bank Corporation Bank
Saraswat
Cooperative Bank
Standard Chartered
Cheque Leaves 25 100 leaves free per year 50 3
Duplicate statement 100 Per Instant 50 Per Instant Free 40
ATM transaction at other
bank ATM outside India (per
transaction)
₹ 108 - - ₹ 140
NEFT Online Payment Free Free Free Free
15. Closing an account
To close an account all the account holders should write to the bank stating that intent to
close the account.
All unused cheques should be cancelled and return to the bank.
The bank may also request the customer to close his account
If the customer is no longer a desirable person and the account has not been operated for a
long term.
If a customer cannot be traced, the balance placed in an unclaimed deposit account .
It’s a statement or correspondence sent to the customer is returned the balance and should
be transferred to the “Dormant Account” .
