Current Account(CA/CD)

The current account is an important indicator about an economy's health. It is defined as the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers. A positive current account balance indicates that the nation is a net lender to the rest of the world, while a negative current account balance indicates that it is a net borrower from the rest of the world. A current account surplus increases a nation’s net foreign assets by the amount of the surplus, and a current account deficit decreases it by that amount. The current account and the capital account are the two main components of a nation’s balance of payments.

Current Account - Eligibility

A Current Account can be opened by below mentioned entities engaged in business activity

• Individual
• Partnership firm
• Sole Proprietor
• Company
• Trust

Documents Required

Current Account for Individuals (business purpose)

(i) Passport. (ii) Voter ID card (iii) PAN Card (iv) Govt./Defence ID card (v) ID cards of reputed employers (vi) Driving Licence

• Proof of identity (any of the following with authenticated photographs thereon)

• Proof of current address (any of the following)

  (i) Credit Card Statement (ii) Salary slip (iii) Income/Wealth Tax Assessment Order (iv) Electricity Bill (v) Telephone Bill (vi) Bank account statement (vii) Letter from reputed employer (viii) Letter from any recognized public authority (ix) Ration Card

• Recent Colour Photograph
• PAN/Form 49 A along with Form 60 if applied for PAN

Partnership Firm

• Partnership deed
• Partnership letter as per the bank’s format
• Entity proof* of partnership firm from:
  • Trade License
  • Shops & Establishments Certificate/Licence
  • APMC/Mandi Licence
  • TAN Registration Certificate.
• PAN Card in the name of firm or Form 49 A along with Form 60 (if applied for PAN)
• Address proof* in name of the firm from (if address is different or not given on the Entity proof):
  • Latest Three months Bank Account Statement along with account opening cheque
  • Latest copy of Electricity Bill
  • Latest copy of Telephone Bill
  • Property Tax bill along with Tax payment receipts
  • Water Tax bill along with Tax payment receipts
• Identity and Address proof of all partners.
• Partnership Registration Certificate (if partnership firm is registered with Registrar of Firms)
• Account opening cheque from existing account of partnership firm or from savings account of partner (in case of new firm)
• No objection certificate (if partnership firm is enjoying credit facility from any other bank(s))

Sole Proprietorship Firm

• First & Second entity proof from: Trade license, APMC/ Mandi license or TAN registration certificate.Please note that both the documents cannot be same.
• Apart from the above list, second entity proof can also be: Latest copy of Electricity Bill or registration of firm with EPFO/ ESIC
• Address proof in the name of proprietor or proprietorship firm (if communication address is different or other than address mentioned on entity proofs)
• Proprietorship Letter as per the bank’s format
• Identity proof of proprietor
• Account opening cheque from existing account of proprietorship firm or from savings / individual current account of proprietor (in case of a new firm)
• Residence address proof of the proprietor (if account opening cheque is collected from proprietor's savings / Individual current account)
• PAN Card in the name of the Proprietor or Form 49 A along with Form 60 (if applied for PAN)
• No objection certificate (if proprietorship firm is enjoying credit facility from any other bank (s)

Private/Public Limited Company

• Certificate of Incorporation
• Board Resolution (BR)
• Memorandum of Association (MOA) & Articles of Association (AOA)
• Certificate of Commencement of Business (COB) (only for Public Ltd Company)
• Latest list of directors as per the bank’s format
• Communication address proof in the name of company (if different than that mentioned in the Certificate of Incorporation):
  • Trade License
  • Shops & Establishments Certificate/Licence
  • APMC/Mandi Licence
  • TAN Registration Certificate
  • Latest Three months Bank Account Statement.
• Registered address proof of the company (if different than that mentioned in the Certificate of Incorporation)
• Identity proof of all authorized signatories
• Proof of appointment of current director/s (if his/her name is not available in first list of Director/s)
• Proof of resignation of Director/s (if name of that Director/s is not available in latest list of Director/s)
• PAN Card of the company or Form 49 A along with Form 60 Only (for New Companies which are less than 90 days)
• Share Holding Pattern of the company as per the bank’s format
• No objection certificate (if Company is enjoying credit facility from any other bank (s)

Features of Current Bank Account

The main features of current account are as follows:-

1. Current bank accounts are operated to run a business.
2. It is a non-interest bearing bank account.
3. It needs a higher minimum balance to be maintained as compared to the savings account.
4. Penalty is charged if minimum balance is not maintained in the current account.
5. It charges interest on the short-term funds borrowed from the bank.
6. It is of a continuing nature as there is no fixed period to hold a current account.
7. It does not promote saving habits with its account holders.
8. Banker requires KYC (Know your Customers) norms to be completed before opening a current account.
9. The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly.
10. There is no restriction on the number and amount of deposits.
11. There is also no restriction on the number and amount of withdrawals made, as long as the current account holder has funds in his bank account.
12. Generally, bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts.

Benefits of Current Bank Account

The advantages of current account are as follows:-

1. 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.
2. It enables businessmen to carry out their business transactions properly and promptly.
3. The businessmen can withdraw from their current accounts without any limit, subject to banking cash transaction tax, if any levied by the government.
4. Home branch is that location where one opens his bank account. There are no restrictions on deposits made in the current account opened in a home branch of a bank. However, the current account holder can deposit the cash from any other branch of a bank other than the home branch by paying a nominal charge as applicable.
5. It helps businessmen to make a direct payment to their creditors by issuing cheques, demand-drafts or pay-orders, etc.
6. It enables a bank to collect money on behalf of its customers and credits the same in their customers' current accounts.
7. It enables the current account holder to obtain overdraft (short-term borrowing) facility.
8. The creditors of the account holder can get credit-worthiness information of the account holder through inter-bank connection.
9. It facilitates the industrial progress of the country. Without its help, businessmen would face difficulties in running their businesses.
10. It has the facilities of Internet-banking and mobile-banking to carry out important business transactions with ease and quickly.
11. It also provides various other advantages (benefits) such as:
    • Deposit and withdrawal of money (cash) at any location.
    • Multi-location funds transfer,
    • Electronic funds transfer,
    • Periodical (monthly, quarterly or yearly) e-mail or download of bank statements in various formats like '.XLS', '.TXT', '.PDF', etc.
    • Support from customer care executives.