Current Account is very important for every type of business because you can withdraw and deposit several times without any restriction.
But when your business is going into a deficit and there is no money in your current account, then it becomes a major problem.
Because the bank charges high penalties on current account. That becomes very difficult for the common man to carry current account. So, closing current account is really a good idea.
I had to face a lot of problems my current account closure process because bank officers didn’t provide me proper guidance.
My purpose to write this article is to give you proper guidance so that you do not have to face any kind of problem during the current account closing process.
Disadvantages of Current Account
There are a couple different disadvantages of using Current Account.
- One of the disadvantage of a current account includes drawing a low interest rate on deposit amount.
- The initial paperwork when opening an account is lengthy and terms are difficult to understand.
- Higher Penalty is charged if minimum balance is not maintained as compared to the saving account. Bank charges high amount when you fail to maintain MAB – (monthly average balance). for example it can be INR 1200/- for per month.
- Bank does not send any alert, regarding maintaining account balance.
- You can’t transfer your current bank account to your nearest branch. Why? Don’t know.
Is it Necessary to Close Bank Account?
Yes, if we are not using our Current Account then we must close it. The bank itself does not close it and the bank charges the high penalty for not maintaining the MAB – minimum average balance.
How to Close Current Account of LLP?
Closing process becomes tough because bank don’t want to lose its customers. Account closure process might be the same within all the Indian banks. In my case bank name was ICICI bank so I am giving a list of required documents to close Current Bank Account:
- Application on company’s letterhead for closing current bank account with stamped and signed by all the designated partners. should clearly mentioned the reason for which you want to close bank account.
- Copy of partnership deed stamped and signed by all the designated partners.
- Original PAN Card of Limited Liability Partnership/Company
- Company’s Debit card, cheque book and passbook (if issued).
- Copy of proof of identity (Aadhar card) and Pan Card of all the designated partners.
- Bank official will also checks your original documents for verification purpose, so always carry your original documents with company stamp.
here I am providing you Letter format to help you closing your current account.
The Branch Manager
(Name of Bank)
Dear Sir / Madam,
Re: Current A/c No (Account Number To Be Mentioned) Closure
We opened the above mentioned current account with your branch on ________ (Date) and regret to inform you that we have to close it with immediate effect as “No business operation is being done”.
Kindly arrange to close the account at the earliest after completion of necessary formalities. The cheque book containing 9 leaves with Nos ______________ to ______________ is being surrendered along with the debit card and Pass Book for necessary cancellation.
Please note that all necessary KYC documents have already been submitted by us and feel free to contact us for further clarifications, if any.
Kindly issue us NOC/Account closure certificate which is needed for winding up of our company.
(NAME OF AUTHORIZED SIGNATORY IN ALL CAPS)
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