How to Open a Company Bank Account in India
A company must operate through a dedicated current account in its own legal name. Personal accounts cannot be used for company transactions - commingling personal and business funds creates accounting, tax, and liability problems.
Account Type - Current Account
Companies and LLPs must hold a current account, not a savings account. Current accounts have no restriction on the number of transactions, no minimum balance requirements for operational use (though banks impose their own minimum average balance requirements), and are designed for business cash flow.
INC-20A - file before the bank expects it
Several banks require a company to provide its INC-20A (Declaration of Commencement of Business) before fully activating the account for operations. INC-20A must be filed with the MCA within 180 days of incorporation. File it as early as possible - immediately after the subscribed capital is deposited into the account.
Documents Required
| Document | Notes |
|---|---|
| Certificate of Incorporation | Original and a certified copy |
| Memorandum and Articles of Association | Certified copy - the bank may accept a self-attested copy |
| Board Resolution | Authorising specific named individuals to operate the account; specifying signing authority (single or joint) |
| PAN card of the company | Mandatory - not the director's personal PAN |
| Address proof of registered office | Utility bill or rent agreement matching the MCA registered office address |
| Identity and address proof of all authorised signatories | Aadhaar, PAN, and passport (if available) of each person authorised to operate the account |
| Passport-size photographs | Of each authorised signatory |
| Shareholding pattern certificate | Some banks require this - a CA certificate or a board resolution certifying the shareholding |
Account Opening Process
Select the bank
Choose based on branch coverage, digital banking features, minimum balance requirements, and any startup or SME banking products on offer.
Draft and pass the Board Resolution
Pass a board resolution specifying who is authorised to open and operate the account, the signing authority mode (single or joint), and the specific bank branch. Each bank typically provides a standard resolution format.
Visit the branch with original documents
Bring the originals and attested copies of all required documents. Most banks complete KYC at the branch - video KYC is available at some banks for companies.
Submit the account opening form
Complete the bank's account opening form, sign all KYC declarations, and submit all documents.
Complete KYC verification
The bank performs KYC on all authorised signatories and directors. For some banks, this involves a video call or in-person identity verification.
Account activated
Most banks activate the account within 2–5 working days of all KYC being completed. You will receive the account number, IFSC code, and cheque book.
Choosing the Right Bank
| Bank Type | Strengths | Considerations |
|---|---|---|
| Public sector banks (SBI, PNB, Bank of Baroda) | Wide branch and ATM network; government trust; lower charges | Slower digital banking; branch visits often required |
| Private banks (HDFC, ICICI, Axis, Kotak) | Strong digital banking; API integrations; startup-friendly products | Higher minimum balance; premium charges for some services |
| Neo-banks / fintech banks (Razorpay X, Fi Business) | API-linked accounts; instant payout; payroll integrations | May not be full-service banks; check RBI licensing status |
Initial Deposit and Minimum Balance
Banks typically require an initial deposit to activate the account. Requirements vary:
- Public sector banks: ₹5,000–₹10,000 initial deposit; minimum average quarterly balance of ₹5,000–₹25,000.
- Private banks: ₹10,000–₹25,000 initial deposit; minimum average monthly balance of ₹10,000–₹50,000 depending on the account variant.
- Some banks offer zero-balance accounts for startups registered with government schemes (DPIIT, Startup India).
- Failing to maintain the minimum average balance attracts a non-maintenance charge - typically ₹200–₹750 per quarter.
Restrictions on Company Accounts
- The account must be in the company’s legal name exactly as it appears on the Certificate of Incorporation.
- Personal transactions of directors must not be routed through the company current account - this creates a legal and tax compliance risk.
- Cash withdrawals above ₹50,000 in a single transaction may require a declaration of purpose under FEMA and income tax rules.
- Cheques drawn on the account must carry the company name and CIN on the face of the cheque.
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