How to Open a Current Account for Your Business in India

To open a current account for your business in India, you need KYC documents for the owner or signatories plus proof that the business exists in its own name: for a proprietorship that usually means any two documents such as Udyam, GST or Shop and Establishment registration; for a partnership, company or LLP it means the registration certificate, deed or MoA/AoA, the entity’s PAN and an authorisation for signatories. This guide lists the documents by entity type based on RBI’s KYC rules, explains how a current account differs from a savings account, walks through the opening process, and gives you a fee checklist to compare banks before you sign.

Current account vs savings account: what is different

A savings account is meant for an individual’s personal money. A current account is meant for business: frequent deposits and payments, cheques to suppliers, collections from customers and higher cash handling. Mixing business receipts into a personal savings account is one of the most common mistakes small business owners make, because it muddles your books, your GST reconciliation and your income tax return.

Feature	Savings account	Current account
Meant for	Individuals, personal savings	Businesses, professionals, firms, companies, trusts
Held in the name of	The individual	The business entity (or the proprietor for a proprietorship)
Interest	Earns interest	Usually no interest
Transactions	Often limited free transactions	Designed for high volumes; limits depend on the variant
Minimum balance	Lower, sometimes zero	Usually higher; varies widely by variant and bank
Overdraft	Generally not available	Can be linked to an overdraft or cash credit facility, subject to approval
Cheque books	Limited free leaves	More leaves, multi-city cheques common
Typical documents	Personal KYC (PAN, Aadhaar)	Personal KYC of signatories plus business documents

Do you actually need a current account?

If your business is a private limited company, LLP, partnership firm, trust or society, yes. The entity is a separate person in law and must bank in its own name. Payments from customers will be made to the entity, and your accountant will need its statements for the books and tax filings.

If you are a sole proprietor, the business is legally you, so you have a choice. In practice, a separate current account in the trade name makes sense once you have regular business income, because:

• Customers and B2B clients often expect to pay a business name, not a personal name.
• Your GST registration, invoices and bank receipts line up cleanly when one account handles only business money.
• Payment gateways, marketplaces and lenders usually ask for a business bank account and its statements.
• When you apply for a loan, a clean current account statement is your best proof of turnover.

Freelancers and very small home businesses with a few receipts a month can start with a separate savings account used only for work, then move to a current account as volumes grow. Ask your CA what suits your case.

Documents required by entity type

The baseline rules come from the Reserve Bank of India’s Master Direction on Know Your Customer (KYC), last updated in August 2025. Banks can ask for more under their own policies, so treat this as the minimum.

Sole proprietorship

The bank first completes KYC of the proprietor as an individual (PAN, Aadhaar or another officially valid document, photograph). Then it needs proof of the business. RBI lists eight types of documents, and the bank should obtain any two:

1. Registration certificate issued by the government, including the Udyam Registration Certificate
2. Certificate or licence issued by the municipal authority under the Shop and Establishment Act
3. Sales and income tax returns
4. CST, VAT or GST certificate
5. Certificate or registration document from Sales Tax, Service Tax or Professional Tax authorities
6. IEC (Importer Exporter Code) issued by DGFT, or a licence or certificate of practice issued by a statutory professional body in the firm’s name
7. Complete income tax return (not just the acknowledgement) in the proprietor’s name, showing the firm’s income, duly authenticated or acknowledged by the Income Tax authorities
8. Utility bills such as electricity, water or landline telephone bills

If you genuinely cannot produce two, RBI allows the bank to accept one, provided it does a contact point verification and confirms the business activity at your address. Most new proprietors find Udyam registration and GST or Shop and Establishment registration the fastest pair to arrange. If you have not done these yet, see our guides to Udyam registration and Shop and Establishment registration.

Partnership firm

• Registration certificate of the firm
• Partnership deed
• PAN of the partnership firm
• KYC documents of the beneficial owners and of the partners, managers or employees who will operate the account
• Names of all partners
• Address of the registered office and principal place of business, if different

Note that RBI treats an unregistered partnership firm as an “unincorporated association”, with a slightly different list (a resolution of the managing body, PAN or Form 60, a power of attorney and KYC of the people operating the account). Ask the bank which list it will apply.

Private limited or public limited company

• Certificate of incorporation
• Memorandum and Articles of Association
• PAN of the company
• Board resolution and power of attorney authorising the people who will operate the account
• KYC documents of beneficial owners and of authorised signatories
• Names of relevant senior management
• Registered office address and principal place of business, if different

Companies are usually asked to open the account soon after incorporation, because share capital has to be deposited. Our private limited company registration guide covers that step.

LLP, trust and society

The RBI Master Direction does not have a separate LLP paragraph in the sections covering companies and firms. In practice banks ask for the LLP’s certificate of incorporation, LLP agreement, LLP PAN, a resolution of the designated partners authorising signatories, and KYC of the designated partners. Trusts need the registration certificate, trust deed, PAN or Form 60 and details of trustees, beneficiaries and settlor. Societies and associations need the managing body’s resolution, PAN or Form 60 and a power of attorney for signatories.

Entity	Core business documents	Who gives personal KYC	Authorisation needed
Sole proprietorship	Any two from the RBI list (Udyam, GST, Shop and Establishment, ITR, utility bill, etc.)	Proprietor	None
Registered partnership	Registration certificate, deed, firm PAN	Partners and signatories	Letter or mandate signed by partners as per deed
Private limited company	Certificate of incorporation, MoA, AoA, company PAN	Directors, beneficial owners, signatories	Board resolution
LLP	Certificate of incorporation, LLP agreement, LLP PAN (bank policy)	Designated partners, signatories	Resolution of designated partners
Trust or society	Registration certificate, trust deed or bye-laws, PAN or Form 60	Trustees or office bearers, signatories	Resolution of managing body

How to open a current account: step by step

1. Get your registrations in order. Make sure the business name on every document matches exactly, including spelling and “Pvt Ltd” versus “Private Limited”. Mismatches are the top reason for delays.
2. Shortlist two or three banks. Consider the branch nearest your shop or office (useful if you deposit cash), the bank your customers or marketplaces pay through, and the quality of the net banking and mobile app.
3. Pick the right variant. Every bank has several current account variants with different minimum balances and free limits. Use the checklist in the next section and estimate your monthly cash deposits and transfers before choosing.
4. Apply online or at the branch. Many banks let you start online and some offer video KYC for certain entity types. Companies and firms often still need a branch visit or a bank representative visit.
5. Submit documents and signatures. Self-attest copies, carry originals for verification, and submit the account opening form signed by all authorised signatories, along with photographs.
6. Allow for verification. The bank may do a physical or video verification of your business address. Keep your board or name plate visible and someone available at the premises.
7. Fund the account. Deposit the initial amount the variant requires.
8. Set up access. Activate corporate net banking with the right maker-checker roles, get the debit card if needed, request the cheque book, and generate a UPI QR in the business name for customer payments.
9. Update everyone. Add the new account to your GST registration, invoices, website, payment gateway and marketplace dashboards, and tell regular customers in writing.

Fees and features to compare before you choose

Banks advertise current accounts by minimum balance, but your real cost depends on how you use the account. Ask for the variant’s schedule of charges and fill in this table for each bank you are considering.

What to check	Why it matters	Question to ask the bank
Average balance requirement (monthly or quarterly)	Falling short triggers non-maintenance charges	Is it monthly or quarterly, and what is the charge if I fall short?
Free cash deposit limit	Shops, restaurants and traders deposit a lot of cash	How much cash can I deposit free each month, at home and non-home branches and machines?
Cash handling charge above the limit	Can be the biggest hidden cost	What is charged per Rs 1,000 above the free limit?
Cash withdrawal limits	Matters if you pay wages or suppliers in cash	Are cash withdrawals at non-home branches charged?
NEFT, RTGS and IMPS charges	Supplier payments add up	Are online transfers free in this variant?
Cheque book leaves	Needed for rent, deposits, some suppliers	How many free leaves per month or quarter?
Debit card and net banking fees	Annual fees vary	Is there an annual fee for the business debit card or net banking?
Demand drafts and pay orders	Tenders and government payments often ask for DDs	What does a DD cost and how many are free?
Account closure and variant change	You may outgrow the variant	Is there a charge to close the account or switch variants?

A real example of what the numbers look like

As one example, State Bank of India’s Regular Current Account page lists a monthly average balance of Rs 5,000, free cash deposits of up to 100 times the previous month’s average balance subject to a ceiling of Rs 5 lakh a month, and free NEFT and RTGS through internet and mobile banking (as checked in October 2026). Other banks and other variants have very different numbers, which is exactly why the table above is worth filling in.

Worked example: choosing a variant

Suppose a bakery in Pune (an illustrative example) collects about Rs 3 lakh a month in cash and Rs 4 lakh via UPI, and pays suppliers about 25 times a month by NEFT. For this owner, the most important lines are the free cash deposit limit and the cash handling charge. A variant with a slightly higher minimum balance but a cash deposit limit well above Rs 3 lakh will often cost less overall than a low-balance variant that charges for every rupee of cash above a small free limit. Do the maths for your own business with the bank’s actual schedule of charges.

RBI rules if your business has loans

RBI tightened current account rules in 2020 to stop borrowers spreading money across many banks. The rules were eased by the circular “Opening of Current Accounts by Banks – Need for Discipline” dated 29 October 2021. In short:

• If the banking system’s total exposure to you is less than Rs 5 crore, there is no restriction on opening current accounts or getting a cash credit or overdraft, provided you give an undertaking to inform your banks when your credit facilities reach Rs 5 crore or more.
• If the exposure is Rs 5 crore or more, you can keep your current account with any one bank that gives you a cash credit or overdraft and has at least 10 percent of the banking system’s exposure to you. Other lending banks can open only collection accounts, which must pass the money on within two working days.
• Businesses with no credit facilities from banks can open current accounts after normal due diligence.

Most small businesses are well below Rs 5 crore, but if you are growing quickly with working capital loans from several banks, discuss this with your banker and CA.

Common mistakes to avoid

• Name mismatches. The trade name on your GST certificate, Udyam certificate and shop licence should match. Fix differences before you apply.
• Choosing only on minimum balance. A “zero balance” current account can still cost more if cash deposits and transfers are charged heavily.
• Running personal expenses through the business account. It complicates your books and your tax return.
• Forgetting to update KYC. When directors, partners or addresses change, inform the bank promptly. Accounts with outdated KYC can be restricted.

Frequently Asked Questions

Can a sole proprietor open a current account without GST registration?

Yes, if you can produce two other documents from RBI’s list, such as Udyam registration and a Shop and Establishment licence, or a utility bill. GST is only one of the options. Some banks may have additional requirements, so confirm with the branch.

Is Udyam registration enough to open a current account?

RBI lists the Udyam Registration Certificate as one acceptable proof of business. The rule asks for two documents, but a bank may accept just one if it carries out contact point verification of your business address. Many banks will still ask for a second document.

Do current accounts earn interest in India?

Generally no. Current accounts are meant for transactions. Some banks offer sweep facilities that move surplus balance into a fixed deposit, which can earn interest. Check the terms before you opt in.

How long does it take to open a business current account?

It depends on the bank, the entity type and how quickly verification is completed. A proprietorship with clean documents can often be done within a few working days. Companies and firms can take longer because of resolutions and multiple signatories.

Can I have current accounts in more than one bank?

Yes. If your business has no bank loans, or total bank credit below Rs 5 crore, RBI’s 2021 rules do not restrict this, though you may need to give an undertaking to lenders. Above Rs 5 crore, specific rules apply.

Your next step

Gather your business documents, check that the names match, and shortlist two banks. Ask each for the schedule of charges for the variant you are considering and fill in the comparison table with your real monthly cash and transfer numbers. Rules and charges change, so check the bank’s latest published terms, and speak to your CA if you have loans or a complex structure.