Current Account

‘Current Account’ means a form of demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither Savings Deposits nor Term Deposits.

In current accounts, as the money deposited can be withdrawn at any time, as there is no limit as to the number of withdrawals, there is significant work involved for the bank. Considering this, the bank does not pay any interest on such accounts.

A Current Account can be opened by –

a) An individual who has attained the age of majority.

b) More than one individual in their joint names (all being major persons)

c) Joint Hindu Families

d) Sole Proprietorship

e) Registered and Unregistered Partnership firms.

f) Private and public limited companies.

g) Club and societies

h) Trusts

i) Others viz. Executors and Administrators.

j) Government and semi-government bodies.

k) Provident Funds

l) Banks, LIC, Subsidiaries of GIC etc.

Before opening a Current Account, a declaration is required to be obtained from the applicant regarding credit facilities, if any, enjoyed by the applicant at any other bank and in case such credit facilities are enjoyed, the particulars thereof are to be furnished.

RBI has now directed that where the applicant is enjoying credit facility (fund-based or non-fund based) from the banking system, the account will not be opened without specifically obtaining a No-Objection Certificate from the lending bank(s).

For all operative deposit accounts opened on or after January, 1, 1994, branches should obtain photographs at the time of opening of the accounts of the deposits/account holders who are authorized to operate the accounts. These photographs should be affixed on account opening forms and specimen signature cards.

Note: 1. Current account in the name of a minor should not normally be opened.

2. A Current account should not be opened which is to be operated under a thumb impression, cross marks or signature by hand of another person.

3. Nomination facility is available in respect of Current account of individuals and sole proprietorship firms.

4. Every current account should be properly introduced.

5. Before opening any deposit account, the due diligence as required under ‘Know Your Customer’ (KYC) shall be made.