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GENERAL

Udyog Aadhaar – Benefits, Registration Process, and Documents Required.

udyog aadhaar - registration process and document required

Opening a business in India is a lengthy process. When starting up a small or medium business (SMB), you may get confused about the requirements for registration. One of the important requirements for registering an SMB is Udyog Aadhaar. It is also known as Aadhaar for business. It is a 12-digit Unique Identification Number provided by the Ministry of MSME.

Udyog Aadhar will enable all business enterprises to file and register themselves. In addition, start-ups can access and avail of all services provided by the government using this Aadhar number. Due to its benefits, all types of businesses should register under Udyog Aadhaar.  

Objectives Behind Udyog Aadhaar

The primary objective of Udyog Aadhaar is to promote the SMB. It does so by simplifying the registration process. Its other objectives include.

  1. It aims to provide information about setting up a business enterprise. So, you should give all the details to set up SMB.
  2. It also helps to provide information about the main schemes. So, the businessmen can avail various benefits, subsidies, and schemes of the Government of India.
  3. You can also get financial assistance by taking loans at less interest rates.
  4. It enables all enterprises to file and register themselves. So, they can access other services by simply using Udyog Aadhar Number.

Features and Benefits of Udyog Aadhaar

The Government introduced Udyog Aadhar to provide many benefits to SMB. And make it easy for them to do business. Here is the list of features and benefits under this scheme – 

  • Registration is online and simplified.
  • You can file all documents on a self-certification basis. As a result, you need not go around to get them certified by an authority.
  • The registration is free of cost. In addition, the registration and approvals to obtain licenses from government authorities and agencies is easy.
  • You can also avail loan facilities without any collateral. And that too at lower interest rates.
  • Besides, you get financial assistance from the government of India as well. For example, subsidies, exemption of octroi, waiver in security deposit in government.
  • There is a facility to resolve your disputes speedily.

Besides the above benefits, you also get various exemptions and concessions:

  • There is a fee reduction for filing patents and trademarks.
  • You can get several exemptions under direct tax laws and excise duties. And it is also applicable for government tenders.
  • There is a significant discount on the electricity bill.
  • You get a waiver of stamp duty and registration fee.
  • You can obtain more than one Udyog Aadhaar with the same Aadhar Number.

How to register for Udyog Aadhaar?

The process of registration and getting Udyog Aadhar is simple, instant, free of cost, paperless and online. Earlier, if you wished to start a business, you had to go through a lot of paperwork and fill different forms. Now, the government introduced Udyog Aadhar to simplify the whole registration process.

Once you register with Udyog Aadhar, you can receive the benefits of several government schemes such as subsidies, easy loan approvals, tax exemptions, fees waivers etc.

Here is how the process works –

  1. Firstly, the entrepreneur should fill a one-page form that he could do online by visiting the official website.
  2. Then, enter your personal information. For instance, the owner’s name, Aadhar card number, mobile number, mail address etc. Aadhar Number is mandatory.
  3. In the above form, you have to submit details about the business. It includes proof of existence of business, details of business activities, bank account details, ownership & employment details, etc.
  4. Self-certify all the documents provided.
  5. You don’t have to pay any registration fee for this process. It is free of cost.
  6. The government verifies the information that you have filled.
  7. After the details are verified, you would obtain the registration number and the certificate on the email address given. 

Documents Required

To register for Udyog Aadhaar, you will require the following documents:

  1. Aadhaar Card of course. If you don’t have one, Aadhaar Enrolment ID Slip will do the work.
  2. Bank Pass Book to verify the bank details.
  3. Voter ID Card
  4. Passport
  5. PAN Card for tax purposes
  6. Driving Licence
  7. If you belong to the reserved category (SC/ST/OBC), you will also need the caste certificate.

In addition to the above, you may have to present other documents in case the need arises. So, ensure that you have all the required documents.

Conclusion 

In summary, Udyog Aadhar is one of the simplest requirements for a startup. The process is extremely simple. And the benefits are surely in the interest of entrepreneurs in India. It is clear that the government of India is encouraging the concept of ‘Make in India’ via such streamlined processes. 

Frequently Asked Questions (FAQs)

1. What documents are required for Udyog Aadhar registration?

For Udyog Aadhaar registration, the documents that you will need are mentioned above.

2. What is Udyog Aadhar Memorandum (UAM)?

Here, the MSME certifies its existence and provides mandatory information such as the owner’s Aadhar details, bank account details etc. After submitting this form, an acknowledgement form is sent to the applicant’s registered email containing the unique UAN (Udyog Aadhaar Number)

3. Can an entrepreneur file for more than one Udyog Aadhar registration?

Yes, an entrepreneur can file for more than one Udyog Aadhaar registration. Although, there is no need to do so. As all activities undertaken by an entrepreneur can be specified or added in one registration.

4. Are Udyog Aadhar and Udyam registration the same?

No, they are not the same. The Government introduced Udyog Aadhar in 2015 for the registration of MSMEs. Afterwards, the Government introduced the Udyam Registration portal in 2020 for registering new MSMEs.

All enterprises having Udyog Aadhar Registration need to re-register under the Udyam Registration portal after 1st July 2020. It is to ensure their validity.

Categories
Banking

ICICI Current Account – Procedure, Charges, and Minimum Balance.

A current account is very beneficial for proprietors, startups, and business professionals to cater to different financial needs. The ICICI bank provides various services related to the current account. The ICICI bank provides its customer with anywhere banking that allows them to avail facilities from any branch like internet banking, bulk transactions, doorstep banking, upcountry cheques, etc. 

Table of Contents

  1. Procedure for opening ICICI Bank Current Account
  2. Documents Required to open ICICI Current Account
  3. Types of ICICI Current Account
  4. Conclusion
  5. Frequently Asked Questions

Procedure to open Current Account in ICICI Bank

The customer willing to open an ICICI bank current account can do so through an offline process by visiting the nearest bank branch or an online process. Following are the steps you need to follow:

Online Process:

Firstly, open the official website of ICICI bank. Go to the business section or click this URL https://www.icicibank.com/business-banking/current-account/index.page

  • Then, Click on the Apply now button on the section opened.
  • The ICICI digital current account form opens up. Enter all the personal details like name, phone number, email id.
  • After entering the details, click on ‘Next’.
  • An OTP will be received on your registered mobile number for verification.
  • Once verified, click on Next, upload all the required KYC documents.
  • Select the variant for ICICI digital current account.
  • Further confirmation will be through a call from the bank and an executive will visit your place for verification.

Documents Required for ICICI Bank Current Account

Following are the list of documents that you may require to open a Current Account in ICICI Bank:

  • Recent passport size colour photograph
  • Account opening cheque
  • Identify Proof document: Driving license, PAN card, passport, Aadhar card, voting card, etc. 
  • Address proof document: Aadhar card, passport, driving license, voting card, utility bills, etc.

Visit ICICI bank’s website for list of required documents for opening a current account.

Types of ICICI Current Account

ICICI bank provides various types of current accounts that differ in the features, fees, and minimum balance requirements.

Variants of Regular Current Account

ICICI Bank current accountsFeatures
New Start up current accountFacilities like free mobile alerts, zero minimum balance current account.
Shubhaarambh current accountZero minimum balance and free NEFT and RTGS transactions.
Smart Business current accountFree RTGS and NEFT and variant change.
Smart Business current account GoldFree RTGS and NEFT and cheque collection and payments.
Roaming Current account GoldFree cheque collection and payment and product type change.
Roaming Current account PremiumFree transaction of non-cash collection.
Roaming Current account ClassicFree RTGS and NEFT and cheque collection and payments.
Roaming current account standardFree RTGS and NEFT and cheque collection and payments.

Variants of Premium Current Account

ICICI Bank current accountsFeatures
Club Elite IvyDedicated relationship manager and unlimited transaction.
Roaming Current account EliteFree mobile alerts, RTGS and NEFT.
Smart Business account- PlatinumFree mobile alerts, RTGS and NEFT.
Roaming Current account- PlatinumFree RTGS and NEFT and cheque collection and payments.
Roaming Current account Gold PlusFree mobile alerts, cheque collection and payment anywhere.
Made 2 orderCustomize account and charge for services.

Let’s check the details of each of these current account offered by ICICI Bank.

New Startup Current Account

The New startup current account offers various benefits and is ideal for a startup.

FeaturesCharges
Average Monthly balance (MAB)For the first 6 months, No MAB required. After 6 months – 25,000
Cash deposit at base and non-base locationFor maintained monthly balance, free limit up to 12 times.
Base location Cash withdrawalFree and unlimited
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees
Number of cheque leavesPer month 100 free cheque leaves
DD/POPer month 10 free DD/PO
Balance of Non-maintenance Per month 1000 rupees
Charges for NEFT/RTGSNEFT/RTGS collections no charges
Payment for IMPSUp to rupees 10,000 charges are 3.50 rupees
Physical account monthly statementPer month 25 rupees
Charges for account closureNo charges within 14 days

Shubhaarambh Current Account

FeaturesCharges
Average Monthly balance (MAB)For first 6 months, No MAB required. After 6 months – 25,000
Cash deposit at base and non-base locationFor maintained monthly balance, free limit up to twelve times.
Base location Cash withdrawalFree and unlimited
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees
Number of cheque leavesPer month 100 free cheque leaves
DD/POPer month 10 free DD/PO
Balance of Non-maintenancePer month 1000 rupees
Charges for NEFT/RTGSNEFT/RTGS collections no charges
Payment for IMPSUp to rupees 10,000 charges are 3.50 rupees
Physical account monthly statementPer month 25 rupees
Charges for account closureNo charges within 14 days

Smart Business Current Account

The Smart business account is the current account that provides free mobile alerts facility and transaction benefit to their customers.

FeaturesCharges
Average Monthly balance (MAB) MAB required – Rs. 25,000 , for RIB -50,000 rupees
Cash deposit at base and non-base locationFor maintained monthly balance, free limit up to twelve times.
Base location Cash withdrawalFree and unlimited
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees
Number of cheque leavesPer month 100 free cheque leaves
DD/POPer month 10 free DD/PO
Balance of Non-maintenancePer month 1000 rupees
Charges for NEFT/RTGSNEFT/RTGS collections no charges
Payment for IMPSUp to rupees 10,000 charges are 3.50 rupees
Physical account monthly statementPer month 25 rupees
Charges for account closureNo charges within 14 days

Smart Business Account (Gold)

This current account allows free cash deposits up to 12 times.

FeaturesCharges
Average Monthly Balance (MAB) MAB required – Rs. 1 lakh
Cash deposit at the base and non-base locationFor maintained monthly balance, free limit up to twelve times.
Base location Cash withdrawalFree and unlimited
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees
Number of cheque leavesPer month 300 free cheque leaves
DD/POPer month 25 free DD/PO
Balance of Non-maintenance If MAB >= 50%Rs. 1000  If MAB < 50%Rs. 3000
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions
Payment for IMPSUp to Rs. 25,000 charges are Rs. 3.50
Physical account monthly statementPer month 25 rupees
Charges for account closureNo charges within 14 days

Roaming Current Account Gold Variant

It is ideal for medium-sized retailers with facilities like free cheque collection and payment.

FeaturesCharges
Average Monthly Balance (MAB) MAB required – Rs. 1 lakh
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 10 lakh.
Base location Cash withdrawalFree and unlimited
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees
Number of cheque leavesPer month 200 free cheque leaves.
DD/POPer month 25 free DD/PO
Balance of Non-maintenancePer month Rs. 2000
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days

Roaming Current Account Premium Variant

It offers free cheque collection, payment, and unlimited cash withdrawal. 

FeaturesCharges
Average Monthly balance (MAB) MAB required – Rs. 50,000
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 5 lakh.
Base location Cash withdrawalFree and unlimited.
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 100 free cheque leaves.
DD/POPer month 20 free DD/PO.
Balance of Non-maintenancePer month Rs. 1500.
Charges for NEFT/RTGSNo charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Roaming Current Account Classic Variant

in the ICICI bank is suitable for local businesses. It offers free cheque collection and payment from anywhere in the country.

FeaturesCharges
Average Monthly balance (MAB) MAB required – Rs. 25,000
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 2.5 lakh.
Base location Cash withdrawalFree and unlimited.
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 50 free cheque leaves.
DD/POPer month 10 free DD/PO
Balance of Non-maintenancePer month Rs. 1000
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Roaming Current Account Standard Variant

It provides free facilities like NEFT and RTGS transactions.

FeaturesCharges
Average Monthly balance (MAB) MAB required – Rs. 10,000
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 1 lakh.
Base location Cash withdrawalFree and unlimited.
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 25 free cheque leaves.
DD/PONil
Balance of Non-maintenance Per month Rs. 750
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Roaming Current Account Elite Variant

It provides free mobile alerts facility and is suitable for high-end businesses.

FeaturesCharges
Average Monthly balance (MAB)MAB required – Rs. 10 lakh
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 1 Crore
Base location Cash withdrawalFree and unlimited
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 2000 free cheque leaves.
DD/POFree of charge.
Balance of Non-maintenance If MAB >= 50% Rs. 5000  If MAB < 50%10,000
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Smart Business Account (Platinum)

It offers facilities like free mobile alerts and other financial benefits.

FeaturesCharges
Average Monthly balance (MAB)MAB required – Rs. 1 lakh.
Cash deposit at base and non-base locationFor maintained monthly balance, free limit up to twelve times.
Base location Cash withdrawalFree and unlimited.
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 600 free cheque leaves.
Charges of non-maintenance of minimum balanceIf MAB >= 50% – Rs. 1000  
If MAB < 50% – Rs. 5000 .
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 25,000 charges are Rs. 2.50 .
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Roaming Current Account Platinum Variant

It provides facilities like free cheque collection and payment collection from anywhere in the country.

FeaturesCharges
Average Monthly balance (MAB)MAB required – Rs. 5 lakh.
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 50 lakh.
Base location Cash withdrawalFree and unlimited.
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 1000 free cheque leaves.
DD/POFree of charge.
Balance of Non-maintenanceIf MAB >= 50% Rs. 2,500  If MAB < 50%Rs. 5,000.
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50.
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Roaming Current Account Gold Plus Variant

It is suitable for bulk transactions and are provided with facilities like free cheque collection and payment from anywhere in the country.

FeaturesCharges
Average Monthly balance (MAB)MAB required – Rs. 3 lakh.
Cash deposit at base locationFor maintained monthly balance, free limit up to Rs. 30 lakh.
Base location Cash withdrawalFree and unlimited.
Non-Base location Cash withdrawalPer day free limit of 50,000 rupees.
Number of cheque leavesPer month 600 free cheque leaves.
DD/POFree of charge.
Balance of Non-maintenancePer month Rs. 3,000.
Charges for NEFT/RTGSno charges for NEFT and RTGS transactions.
Payment for IMPSUp to Rs. 10,000 charges are Rs. 3.50.
Physical account monthly statementPer month 25 rupees.
Charges for account closureNo charges within 14 days.

Made-to-Order Account

It allows customers to customize their account based on their specific business needs accordingly.

FeaturesCharges
Average Monthly balance (MAB)MAB required – Rs. 3 lakh.
Cash deposit at base and non-base locationCash deposit limit is flexible.
Services of free limitsFlexibility to decide the higher free limits.
Number of cheque leavesFlexibility Option to choose cheque leaves.
DD/PODD/PO limits can be customised.
Account StatementDaily basis email statement for free.

Conclusion

If you are a new business owner looking for a reliable Indian bank with a history of good banking and higher adaptability, then go with the ICICI Bank for current accounts. To make your business financial transactions seamless and fast, ICICI is the first choice for many startups and bigger companies functioning in India. They provide a wide variety of current accounts according to the needs of the business. You can check the above current account variants or request a call from ICICI bank customer care for more details.

Frequently Asked Questions

1. How to open an ICICI Bank current account online?

Ans. User can visit ICICI Bank’s official website and apply for opening a current account online. 

2. How can one get a statement for ICICI bank’s current account?

Ans. To get a statement for ICICI bank current statement, follow the steps given below:

  • Login to ICICI Corporate Net banking for a current account using login Id and password
  • Click on the E-statement button
  • Enter the account number, period, and click on the PDF to generate the document

3. How to contact customer care for ICICI bank’s current account? 

Ans. For customer care assistance, you can call on the toll-free number 1800 103 8181, 1860 120 3399, 1860 120 7777. If you have some other queries, you can also check their website,

4. What are the variants of one global trade accounts for the ICICI current account?

Ans. There are 3 types of global trade accounts for the ICICI current accounts: Trade Basic, Trade Gold, and Trade Premium.

5. What is the Club Elite Ivy provided by ICICI bank?

Ans. Considering the banking needs for the special current account clients, Club Elite Ivy is an exclusive relationship program provided by ICICI bank.

Categories
Banking

Zero Balance Current Account – All You Need to Know

Many of you might have heard about various types of accounts in banks. They help organizations, business professions or an individual to manage the day to day withdrawals or transactions. But, businessmen have to face a lot of trouble maintaining the minimum balance. And when there is a problem, there is a solution. That is why the zero-balance current account was introduced.

Want to know about this marvelous innovation? Let’s get started.

Table of Content

  1. What is a zero balance current account?
  2. Features
  3. Procedure for opening zero balance current account
  4. Eligibility criteria
  5. Document Required
  6. Zero balance current account offered by different banks
  7. Conclusion
  8. Frequently Asked Questions (FAQs)

What is a Zero Balance Current Account?

You may know what a current account is. In case you don’t, it is a bank account that is used by business professionals, entrepreneurs, firms, or organizations that perform a large number of daily monetary transactions. It is so because it offers a couple of advantages that other accounts does not offer.

But one thing is common about them. All types of bank accounts require you to maintain a minimum average balance in your account. It may be irritating sometimes, right? To solve this problem, the concept of a zero balance current account was introduced. And this innovation spread like fire.

That is why various banks in India, like ICICI Bank, Axis Bank, SBI, etc., offer a current account with no requirement of maintaining a minimum average balance.

Features

  • It can be operated by an Individual, NGOs, Trust, Public or Private companies, etc. 
  • There is no requirement for maintaining minimum average balance.
  • Although there is no requirement of minimum balance, it doesn’t offer interest as well.
  • There is a facility for unlimited withdrawal from the home branch. But there is a limit on the number of withdrawals from a non-home branch.
  • It offers various direct payment facilities like NEFT, Demand draft, Pay orders, RTGS, etc.

How to open a Zero Balance Current Account?

Opening a zero-balance account is very easy and simple. After all, what will be the point of making the process complex? It will discourage people to open a bank account for their business. And you know that business is the backbone of the economy.

Nowadays, every bank offers a current account. So, you can visit the bank of your choice. Afterward, you have to fill out the account opening form with all details required. Lastly, submit the filled form along with the required KYC documents. And that’s the end of it.

How to open a Current Account online with zero balance?

Technology is becoming pretty advanced, isn’t it? Nowadays, it is also possible to open a bank account while sitting at your home. You can open it online as well, by following these steps.

  • Firstly, open the official website of the bank. For example, if you select Axis Bank, go to the website https://www.axisbank.com/business-banking/current-account/digital-current-account/offers.
  • Then, select the option for the account opening form and download it.
  • After downloading the form, you have to fill in the necessary details.
  • Then download the form and print it.
  • Finally, visit your nearest bank branch with the filled printed form and all the required KYC documents and submit them.

That’s it! Your account is good to go.

Eligibility Criteria for Zero Balance Current Account

Banks set eligibility criteria to open a zero balance current account. But, don’t worry about satisfying it. It’s no rocket science. The basic criteria are that you should belong to any of the following categories:

  • An individual resident.
  • Sole trader or proprietor.
  • A private or public limited company.
  • A trusted and partnership firm.
  • NGO, Trust, or Societies.

See, we told you, right? All of you can satisfy the basic criteria without breaking a sweat.

Required Documents

The documents required may vary for different banks depending upon their internal policies.

  • A passport size photograph
  • For proof of identity, you can submit any one of the following:
    1. Aadhar card
    2. Passport
    3. Driving license
    4. Pan card
    5. Voter id
  • For address proof, any of these documents is sufficient:
    1. Water, electricity, telephone bills
    2. Ration card
    3. Rent agreement
    4. Driving license
    5. Bank statement

Zero Balance Current Account offered by various banks

The different banks offer different schemes for a current account without the requirement of a minimum balance.

Nowadays, the startup culture is thriving in our country. Launching one has become a fad among the Millenials. And why not? They help the entrepreneurs to gain practical knowledge and experience, besides motivating them to quit the 9 to 5 routine.

This is what most banks keep in mind. That is why they have developed customised features exclusively for startups. For example, ICICI Bank’s Shubbharambh Current account and New Startup Current account offer financial benefits to potential start-ups, businesses, and firms. Kotak Mahindra bank offers various schemes as per your business needs and multiple benefits to customers.

Anyways, here is a list of banks offering zero balance current accounts with innovative names:

Zero Balance Current Account
Bank NameZero balance Current Account
Axis Bank Local current account
Indusland Bank Indus Freedom Current account  
ICICI Bank Shubhaarambh and New startup current account  
Bank of Baroda Startup current account  
HDFC Bank
Government or institutional current account  

Want to know about them in detail? Well, here you go.

Axis Bank Current Account

The following table shows the advantages and features of Axis Bank Local’s current account.  

FeaturesCharges
Average Monthly Balance (MAB)No minimum amount requirement, zero.
Limit for cash depositNo charges up to 3 lakh rupees per month.
Home Branch withdrawal limitNo charges up to 75 transactions.
Non-Home Branch withdrawal limit
Charges for NEFTFor transactions above 2 lakhs, the charge is 25 rupees.
Charges for RTGSFor transactions of 5 lakhs and above, the charge is 50 rupees.
Annual Charges1999 rupees + service tax (Per month 75 free transactions)

IndusInd Bank Freedom Current Account

You may wonder about the hidden meaning behind its name. Sounds exciting, isn’t it? Well, it lives up to its name. That is why it doesn’t charge even a single penny on the transaction.

What’s more, it even sends physical and digital bank statements. It helps in managing the expenses and the cash flows of the business. Thus, becoming your all-time financial manager.

Due to its unique features, it is best suited for small and medium businesses with no requirement of minimum balance.

FeaturesCharges
Average Monthly Balance (MAB)No minimum amount requirement, zero
Limit for cash depositNo charge up to 4 lakh rupees per month
Home Branch withdrawal limitFree of charge
Non-Home Branch withdrawal limitFree of charge
Charges for NEFT, RTGS, IMPSFree of charge
Account Statement per MonthPhysical statement per month by post and free email statement
Cheque LeavesCheque book issuance is free of charge

ICICI Bank Current Account

The majority of the banks offer a single type of current account. But ICICI Bank overshadows them all, by developing an additional type. They are as follows:

New Startup Current Account: It is ideal for small and medium start-ups to manage their finances and transactions through other mediums.

FeaturesCharges
Average Monthly Balance (MAB)Initial six months, no minimum balance required.
Limit for cash depositFor maintained monthly balance, free limit up to twelve times.
Home Branch withdrawal limitUnlimited and free.
Non-Home Branch withdrawal limitFree of charge up to 50,000 rupees per day.
Account Monthly Statement25 rupees per month for a physical statement.
Cheque leavesFree up to 100 cheque leaves per month.
Charges for account closing 1000 rupees, if the account is closed after 14 days.

The Shubhaarambh Current account: As the name suggests, it is a new beginning in the banking industry. It offers more benefits to its customers, as compared to others. It is also suitable for Proprietorship start-ups.

FeaturesCharges
Average Monthly Balance (MAB)Initial six months, no minimum balance required.
Limit for cash depositFor maintained monthly balance, free limit up to twelve times.
Home Branch withdrawal limitUnlimited, free.
Non-Home Branch withdrawal limit50,000 rupees free of charge per day.
Account Monthly StatementPer month twenty-five rupees for physical statement.
Cheque leavesFree, up to 100 cheque leaves per month.
Charges for account closing 1000 rupees, if the account is closed after 14 days.

Bank of Baroda Startup Current Account

The above banks offer zero balance facilities for six months. But Bank of Baroda takes it to the next level. It does not require maintaining a minimum balance for up to 2 years. So, you are hassle-free during this time. They provide account statements for free twice a month. But they don’t stop here. Besides these facilities, there is no limit for cash withdrawal as well.

FeaturesCharges
Average Monthly Balance (MAB)Initial two years, no minimum balance required.
Limit for cash deposit50,000 rupees per day limit
Home Branch withdrawal limit Free of charge
Non-Home Branch withdrawal limitFree limit up to 25,000 rupees per day
Charges for NEFT, RTGS, IMPSFree of charge for two years
Account Statement per MonthFree of charge, provided two times a month
Cheque LeavesFree of charge for two years, per month 200 cheque leaves provided
Charges for account closing (after 14 days)500 rupees for an individual account, 800 rupees for a non-individual account

HDFC Bank Current Account

HDFC Bank is considered the best bank among all. It is due to the exclusive features provided by them. This case is no different.

It is a Government or Institutional account, which offers facilities like free account statements, fund transfers, and more without maintaining any minimum balance of up to two years.

FeaturesCharges
Average Monthly Balance (MAB)Initial two years, no minimum balance required.
Limit for cash deposit50 lakhs rupees per month free of charge.
Home Branch withdrawal limitFree of charge.
Non-Home Branch withdrawal limitFree, limit up to 1 lakh rupees per day.
Charges for NEFT, RTGSFree of charge.
Account Statement per MonthFree of charge.
Cheque LeavesFree of charge, per month 500 cheque leaves provided.
Charges for account closing (after 15 days to 6 months)500 rupees.

Conclusion

Considering the present scenario, bank accounts have become a necessity among businesses. But there are restrictions related to transactions, minimum balance, and withdrawals. To overcome them, startups and businesses use zero-balance current accounts. It will not only help in carrying out a high number of transactions but running businesses smoothly as well. In India, many banks provide the zero balance current account with many customized benefits to the businesses.

So, it’s essential that you should choose the best-suited account, considering your requirements. If you are struggling to find one, this article can be your guide.

Frequently Asked Questions

Q1. Is GST Number mandatory for opening a zero balance current account?

Ans. No, a GST number is not mandatory for opening a zero balance current account.

Q2. For opening a bank account, is a PAN card compulsory?

Ans. The Reserve Bank of India (RBI) has made the Aadhar card and PAN card compulsory documents for opening a bank account.

Q3. Which banks provide online services for opening a zero balance current account?

Ans. Banks like Indusland, Axis, Bank of Baroda, ICICI, etc., provide online services to open a zero balance current account. 

Q.4 Is there a facility of ATM in the current account?

Ans. Yes, there is a facility of ATM for current accounts, individual or joint accounts.

Q.5 What documents are required for opening a current account with zero balance?

Ans. Following are the necessary documents required for opening a zero balance current account:

  • Recent passport size colour photograph.
  • Address Proof like bills, rations card, voting card, bank statement, business registration proof, etc.
  • Identity proofs like an Adhar card, PAN card, driving license, business registration certificate, etc. are required.

Q.6. Can I open a zero balance current account in ICICI Bank?

Ans. Yes, you can open a zero balance current account in ICICI Bank easily through an online or offline process. ICICI bank provides two types of current accounts – a New Startup Current Account and a Shubhaarambh Current Account.

Q.7 Which bank is the best for zero balance current account?

Ans.  ICIC Bank is the best for opening a zero-balance current account. It is ideal for SME, startup and freelancer to manage their finances and transactions. Most of the new startups prefer the seamless service of ICICI zero balance current account.

Categories
Banking PAYMENTS

IMPS – Meaning, Fund Transfer Limit, Timing and Charges.

The Immediate Payment Service (IMPS), which allows account holders to connect a bank account and transfer funds via mobile phones 24x7x365. Since February 2012, about 15 banks have made the service available to their customers, and the number of people using it has increased dramatically. As of now, almost all major banks have expanded the service.

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What is IMPS?

IMPS stands for Immediate Payment Service, launched by the National Payment Corporation of India (NPCI) in 2010. It transaction is a real-time money transfer system interconnecting different banks in India. It offers a 24x7x365 domestic money transfer service via mobile phones to any part of India.

Uses

It has multiple uses. Some of the most significant are as follows.

  • Make a money transfer.
  • Make Online Payments.
  • Vendor Payment.
  • Bulk Payouts.
  • Refund payment for cancelled e-commerce order.
  • Money transfers to merchants for purchases.
  • Make purchases with your mobile device.
  • Check the status of the Aadhaar seeding with your bank account.

IMPS Fund Transfer Limit

The transaction limit for IMPS transfers is Rs. 2 lakh. Banks, on the other hand, are free to set their own upper limit. However, within the first few days after adding a new beneficiary, the limit can be strict. Therefore, Before you make a fund transfer, check with your bank to verify the fund transfer limit.

Charges for IMPS Fund Transfer

Just like other systems of transferring funds, there are also charges for IMPS fund transfer. Various banks have different fees. 

Transferring Amount Transaction Charges (excluding GST)
Rs. 0 <= Rs. 10,000Rs. 2.50
Rs. 10,000 – Rs.1,00,000Rs. 5
Rs. 1,00,000 – Rs.2,00,000Rs. 15

Advantages

  • Domestic money transfer is instant.
  • Available 24*7
  • A safe, secure and stable platform.
  • Easily reachable.
  • Mobile, Internet, and ATM services are all available.
  • For initiating purchases, you have a variety of input choices to choose from, such as Account no-IFSC, MMID, or Aadhaar number.

Step by Step Guide

The following approaches are available for IMPS money transfers:

  • SMS banking through mobile phones.
  • Smartphones using net banking or smartphone apps.
  • You can also make IMPS transaction through ATM and internet banking.

Let us now look at some general steps to make IMPS Transfers.

  • Choose the payment platform you choose to use and log in with your credentials.
  • Enter the receiver’s MMID and mobile phone number. Alternatively, you may enter the bank account details with an IFSC code or Aadhar card number.
  • Fill in the amount you want to transfer.
  • Add any comments or the remark for the money transfer.
  • The last step is entering the Pin, and that’s it.

If the transfer happens successfully, both the receiver and sender will receive a credit and debit message on their mobile phones.

Frequently Asked Questions (FAQs)

  1. How to enable IMPS transaction?

For the sender

If a customer wishes to do an IMPS transaction through a mobile phone, he or she must first register under Mobile Banking. However, Mobile registration is not needed for phone, ATM, or bank branch channels.

For the Receiver

For getting payments, get MMID from the bank and share it with the sender, or alternatively, share Bank account details, IFSC, or Aadhaar number. The receiver will have to register his or her phone number to receive transaction-related SMS notifications.

  1. Can we link two or more bank accounts with a single mobile number?

Yes, You can do that. However, every account associated with a single mobile number will have a different MMID.

  1. What is MMID?

Banks issue Mobile Money Identifiers (MMID), which are a 7-digit unique number. MMID is one of the inputs that enable fund transfer when combined with a mobile number. The combination of a mobile number as well as an MMID is uniquely linked to a bank account and helps in the identification of the beneficiary. The same Mobile Number can be connected to multiple MMIDs.

To get MMID, you can contact your bank.

  1. Do I have to re-register for Mobile Banking if I change my phone number?

Yes, customers must notify their banks of their new mobile numbers.

  1. Is IMPS system equipped with a stop payment feature?

Since IMPS is an instant fund transfer service, payments cannot be stopped or cancelled, once initiated.

  1. What are the deadlines for sending and receiving IMPS payments?

IMPS transactions can be submitted and received 24 hours a day, seven days a week, including holidays.

  1. What do I do if I have a complaint about an IMPS transaction?

Customers may file a complaint through their bank branches about IMPS transactions.

  1. Is it safe to send money through IMPS?

IMPS is a reliable, stable, safe and cost-effective system. It is one of the most popular and preferred systems for transferring money.

Categories
Banking PAYMENTS

RTGS – Meaning, Timing, Limit and Charges for RTGS Fund Transfer.

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What is RTGS?

The term “Real-time Gross Settlement” or RTGS refers to a particular type of fund transferring system to transfer money from one bank to another bank account in a different bank.

It works as a continuous process for settling down payments in real-time based on an individual transaction-by-transaction mechanism without netting. The simplified approach of transaction management of this system makes it an essential system for central banks.

How does RTGS transaction work?

By real-time, it means an immediate settlement of fund transfer. The RTGS transactions settle in the receiving bank immediately after transferring from the sending bank. Here gross settlement refers to a particular settlement method of funds transfer where transactions occur individually without clubbing multiple transactions altogether.

RTGS is used for high-value interbank fund transfers. The central bank of India (RBI) operates and manages the RTGS system. RTGS transfer frequently requires immediate completion and clearing. However, as soon as the transaction settlement is complete, it has no reversal scope.

Information needed for RTGS Transfer

Here is a list of information that needs to be furnished to a bank to initiate the Real-time gross settlement remittance.

  • Consider the amount you want to transfer.
  • Ensure your account number from where the bank will debit your funds for the transaction.
  • Name of the beneficiary’s bank and respective branch.
  • Account number of the beneficiary customer.
  • Name of the payee.
  • IFSC number of your beneficiary’s bank branch.
  • Sender-to-receiver information (optional).

How to do RTGS Transfer?

Before opting for the RTGS fund transfer, you need to know the steps accurately to make the transaction.

  • Log into the internet banking account of your bank by inputting your user ID and password.
  • Go to the Homepage or Dashboard and tap on the option of “Funds Transfer”.
  • Select the option of RTGS from the drop-down list. Then enter the account details of the beneficiary.
  • Thoroughly check all the information you inserted and finally Submit. Once done, the system credits the money to your beneficiary’s bank account within 30 minutes.

Advantage of Real Time Gross Settlement

The real-time gross settlement system is a much more lucrative banking system and includes several benefits. Following are a few merits of opting for Real-Time Gross Settlement.

  • It is pretty safe and secure for fund transferring purposes.
  • The remitter does not require any physical cheque or demand draft to make a transaction.
  • Each of the transactions has its legal backing.
  • Fund transfers through RTGS does not have any limit.
  •  The RBI caps the charges for RTGS transactions.
  • The beneficiary or payee need not visit a bank branch to submit paperwork-based instructions.
  • The beneficiary will not have to worry regarding loss/ theft of physical instruments or the chances of facing fraudulent encashment.
  • It let remitters make payments from their place of work via internet banking.
  • The RTGS timings have no bounds. This funds transfer system is accessible at your fingertips 24×7 all days throughout the year as per the latest notification by RBI.

RTGS vs NEFT

NEFT stands for National Electronic Fund Transfer. It works as an electronic fund transfer mode that operates on a Deferred Net Settlement (DNS) basis. It does settlement of transactions in batches and occurs at a particular interval of time. All the transactions remain held up till that specific time. Businesses use RTGS for a high-value business transaction, e.g., vendor payment, bulk payouts, salary payout.

For instance, the NEFT settlement occurs 6 times a day during the weekdays and 3 times on Saturdays. Suppose you opt to initiate any NEFT transaction after a designated settlement time. In that case, you need to wait until the next assigned settlement time.

On the contrary, in Real Time Gross Settlement, the settlement member banks process the transactions continuously without any waiting period during business hours.

Conclusion

The inclusion of the real-time gross settlement system in the banking network has added many benefits to the entire industry. It not only includes significant security coverages but also simplifies the fund transferring process, benefiting several users.

FAQs

1. Will the remitting customer get back the money if not credited to the beneficiary account?

Yes. If RTGS transfer fails to credit funds to the respective beneficiary’s account, the money received at the RTGS-member bank will be sent back to the originating bank within an hour of receipt of the payment or before the end of the RTGS business day.

2. What is the timing of RTGS?

The RTGS service window for a customer’s transaction remains available for 9.00 – 15.00 hours on weekdays. Whereas, on Saturdays, it remains open from 9.00 – 12.00 hours. However, RTGS timings may vary depending on the timings of the remitters’ branches.

3. Can the remitting customer track the remittance transaction?

When the RTGS system credits funds into the beneficiary’s account through internet banking, the remitting customer gets a confirmation through an e-mail/ SMS. But when done through the bank’s branch, remitters must contact the RTGS/ NEFT Customer Facilitation Centers for tracking remitted transactions.

4. Can I use a previous RTGS beneficiary to complete an RTGS payment without re-entering the payee’s details?

Yes, the “RTGS Payees” tab comes with a list of already-added RTGS beneficiaries. So, while you select the payee’s name and tap on the “Pay Payee” button, the “Enter RTGS Payment” screen automatically shows the details of the selected payee. Also, from this screen, you can choose any previous payee from the drop-down box of “Select RTGS Payee.”

5. What is the RTGS limit in transactions?

The minimum RTGS limit is Rs. 2 lakhs. There is no maximum limit for RTGS transactions when you do the RTGS fund transfer by visiting the bank branch. However, if you do RTGS fund transfer through internet banking, you can send a maximum of Rs. 25 lakhs to a payee per day.

6. Can a customer initiate a transaction for a future date?

No, the RTGS system does not accept future dated transactions.

7. What is UTR number?

UTR stands for Unique Transaction Reference (UTR). UTR number is a 22-character code used to identify a transaction in the RTGS system uniquely.

8. How much time does RTGS take to transfer money?

Fund transferred through RTGS reaches the beneficiary branch in real time, however, it may take up to 30 minutes to show in the beneficiary bank account.

Categories
Banking

Current Account: All you Need To Know About.

A business has to do a lot of transactions. But you may know that there are various restrictions imposed by the bank regarding withdrawals and transactions. It was creating problems for the business class, who used to have enormous transactions. To solve these problems, the concept of the current account was introduced. And trust me, it was a revolution in the banking industry!

Want to know about this magnificent innovation? Here you go.

Table of Contents

What is a Current Account?

It is a type of bank account that companies, firms, businessmen, etc. generally use due to their frequent and huge transactions (inward and outward transactions) with the bank. Due to its huge popularity, it is the most common in any commercial bank. Other accounts provide facilities for deposits, withdrawals, etc. Similarly, current accounts provide these facilities. However, there are some features that make them different from others.

Before moving ahead towards the advantages and disadvantages, let us know the different types of accounts offered by different banks. 

Types

It is rightly said that the customer is king. The same applies to banks as well. And every customer has a different set of expectations and requirements. To cover these requirements, the banks generally offer 5 types of current accounts.

  • Standard Current Account: It is the most commonly used account for business purposes. Here, the customer has to maintain a minimum monthly balance. Due to frequent transactions, banks do not offer interest on the deposited amount. 
  • Basic Current Account: It is suitable for the customer whose income is not substantial such as pensioners or young people. It is suitable for customers to manage their finances. However, one must remember that it might come with a daily cash withdrawal limit. To conclude, you can consider it an extension of a savings account.
  • Premium Current Account: It is designed for people who generally have very high-value banking transactions. So, it provides exclusive banking facilities to business users.
  • Packaged Current Account: Just as its name, it is a complete package for a business. Sounds exciting, right? It not only fulfils its basic purpose but it comes bundled with other features like medical support, travel insurance, etc. So, you don’t have trouble while searching for these facilities.
  • Foreign Currency Current Account: Only Indian residents can open the above accounts. Don’t you think that it will be unfavourable for the non-residents? That’s where the Foreign Currency Account comes to the rescue. It solves the problems of NRIs or the people who have frequent transactions in foreign currencies.

Advantages 

As mentioned above, it is popular among companies, businessmen, etc. It is so because it offers a lot of advantages to business users.

  • No transaction limit: There is no limit on the number of transactions. Therefore, the customer can carry a large number of transactions daily. So, you can focus solely on business without worrying about the transaction limit.
  • No prior notice: Customers can withdraw money and deposit money without giving any notice to the bank. So, you can transact at your convenience.
  • The account holder can issue a demand draft.
  • There is no limit on the number of deposits in the home branch.
  • Overdraft facility: The best feature that makes current accounts unique is that they provide overdraft facility. The overdraft facility allows a customer to make payments over the balance present in the account. For example, you can withdraw Rs 50k, even when you have a balance of Rs 40k. But use the facility carefully. Else, you may have to pay interest on the outstanding balance.
  • No limit on cash transactions: There is no limit on the cash that a customer can withdraw. However, it should be as per the banking cash transaction tax, if applicable. 

Disadvantages

Like a coin, everything has two sides. A current account is no different. If they had no disadvantage, everyone would have opened a current account. But that is not the case. It is so because it misses out on a few things. Below mentioned is the list of demerits:

  • No interest: The customer does not get any interest on the available cash balance in the bank account. It may discourage people to save money.
  • Extra charges: If the customer wishes to avail of extra service, then he has to pay extra as a service charge to the bank. 
  • Specified Limits: There is a limit on the number of cheque books and demand drafts that one can issue in a month. But thanks to modern payment methods like NEFT and UPI, this limit is also considered sufficient by people.
  • Minimum balance: The account holder has to maintain a minimum monthly balance failing on which he might have to bear the penalty charged by the bank.

The minimum balance requirement varies from bank to bank. In some banks, you have to maintain an Average Quarterly Balance. While other banks may require you to maintain an Average Monthly Balance. But many people may not maintain the minimum balance. Don’t worry. There is a facility of Zero Balance Account. Here, you don’t need to maintain a minimum balance. So, you can transact without any restrictions!

Current Account vs Savings Account: Which one is Better?

If you would have read till here, you may know the answer. And the correct answer is: It depends on your requirements.

Here’s a summary of the differences between them:

Current AccountSavings Account
No interest is paid by the bank.Bank pays a nominal interest to the customer.
There is no limit on the number of transactions.Limited transactions are allowed.
It is generally used by business class.It is used by the general public. 
A high minimum balance is to be maintained. But there are zero balance accounts as well.You can maintain a low minimum balance. It depends from bank to bank.
Overdraft facility is available.Overdraft facility is not available.
Even companies and firms can open a current account.It can be opened by individuals only.

Each of them has its own set of merits and demerits. So, consider them while choosing the type of account you want to open. This way, you will be able to reap the best out of them.

Conclusion

Thus, having a current account is definitely a good choice. Especially, if you fulfil its criteria. The benefits that you can derive are endless and the cost for the same won’t break your bank.

So, it’s time to get in touch with your banker and open a current account of your choice, considering your requirements. You can have a look at Best Current Account – A quick guide for an entrepreneur to know how to choose the best among all.

Don’t know how to open one? Arrange these documents and you are good to go

Categories
Banking

Best Current Account for Startup – A Quick Guide

Running a business, especially a startup, is not an easy task. There are many decisions involved, like choosing a proper workspace, hiring professionals, managing finances, opening an account with the best bank for the current account, etc. As soon as startup entrepreneurs register their company, many banks start offering current accounts. It becomes challenging to choose the best current account, especially for a startup. There are many factors to consider while choosing a bank for a current account suitable for your company, like minimum balance requirements, internet banking facilities, maintenance charges, and other facilities.

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How to choose best current account for startup?

For a startup, you should use a separate bank account to maintain all the business transactions, which will make it very easy to understand and maintain your finance. Many banks offer help to young entrepreneurs & startups to grow their businesses. Banks give more facilities with a suitable environment and manage business finances in a simple way, which can reap lots of benefits at the initial stage of business.

While choosing the best current account for your startup, you should consider minimum balance requirements, fees & charges, credit facilities, cash transaction limit, and other benefits. The best bank account will offer you many benefit schemes for starting your company. We have gone through various offerings and selected a few for you. Here are few banks where you can open a current account for your startup.

IndusInd Bank

IndusInd Bank has several current account offerings focused on small and medium businesses. These current account types are designed keeping in mind the flexibility required to boost your business.

IndusInd Freedom Account (Highly recommended)

  • Most recommended current account option for startup businesses.
  • This account can be opened with zero balance, and it offers several benefits for startup businesses.
  • You need not maintain a monthly average balance. This means that the minimum balance to maintain the account is zero. 
  • Other annual charges are also significantly less. There are no charges for cheque books and many other services.
  • The account can be operated through Net banking, Mobile App or ATM. The bank provides its customers with many more benefits and flexibility. 
  • Only one transaction per month is required to keep the account operative.

Indus Blue Current Account

  • Best suited for small businesses, professionals, consultancies and other service providers.
  • Includes all the basic services and benefits with a monthly balance requirement of Rs. 10,000.
  • Free account to account to transfers within the bank 
  • Free collection of cheques across the network.

Pioneer Current Account

  • Seamless banking for day to day business transactions.
  • No charges on non-maintenance of minimum balance.
  • Innovative options to ensure cheques don’t bounce.

Indus Max Current Account

Monthly balance requirement of Rs. 10,000 only ensures you can manage your business easily

IndusInd Bank has several other current account offerings like Indus Prestige, Indus Gold Plus, and Indus Silver. However, most of these current accounts are suited for regular businesses. The IndusInd Freedom Account delivers the best value and flexibility to upcoming startups.

HDFC Bank

It is one of the most customer-friendly banks, and therefore, it is a great option to have a current account with them for any startup business. 

HDFC SmartUp Current Account (Highly Recommended!)

  • This current account type from HDFC specially caters to startup businesses.
  • The current account comes with a waiver of 12 months for minimum balance maintenance. So it is a significant relief for a startup business. After the waiver period, you have to maintain the minimum balance quarterly. 
  • Some branches of HDFC Bank also offer co-working space for startups. 
  • The bank also provides Internet Banking Service.

HDFC Max Advantage Current Account

  • An account holder can deposit and withdraw cash upto 12 times a month at any HDFC Bank Branch.
  • This account allows unlimited free NEFT/RTGS transactions.
  • If you maintain a healthy minimum balance, you will be allowed 150 transactions for every Rs. 1 lakh of balance maintained.
  • Access your bank account via NetBanking or Mobile app.
  • Apart from the above current account offerings, HDFC also offers a regular current account. Customers can enjoy free cash deposits and access the bank’s services across any HDFC branch. However, their SmartUp offering is ideal for startups.

Axis Bank

It is a leading private sector bank that gives many benefits and facilities to startup companies who open current accounts with them. 

Axis StartUp Current Account (Highly Recommended)

  • The bank provides a 24-month waiver on minimum balance requirements for Startup Current Accounts. 
  • Service charges are also waived off for two years during initial period. That helps startups to manage their expenses. 
  • The bank gives the facility free cash deposits and withdrawals at any of its branches as per the limit. 
  • Zero charges for Cheque books, demand Drafts, or Pay Orders. 
  • Bank provides many more benefits to startup current account holders.

Axis Advantage Current Account

  • Customers can deposit Rs. 3 lakh per month and can withdraw unlimited cash from any branch. 
  • Account holders can go fully digital and perform NEFT/RTGS transactions unlimited times.
  • The monthly average balance requirement is Rs. 25,000.

Axis Classic Current Account

  • Account holder is required to maintain a minimum balance of Rs. 1 Lakh.
  • Customers enjoy a monthly cash deposit limit of Rs. 12 lakh and unlimited cash withdrawals.
  • Unlimited NEFT/RTGS transaction.

Axis Bank also offers various other current account types like Axis Privilege, Axis Normal and Axis Channel One. However, most of these bank accounts are suitable for large businesses. Axis StartUp is the most recommended account type for startups.

Yes Bank

It offers different types of current accounts as per the needs of different businesses types.

Yes Head Startup Account (Highly Recommended!)

  • It is a zero balance current account for startups in the 1st year. 
  • It offers many benefits to young companies in their starting period. 
  • Engaging in partnerships with other payers like T-hub, Indian Angel Network, etc., they provide advisory services to the startup companies. 

With many benefits, the bank offers end-to-end solutions for all banking and digital services.

Business Growth Current Account

  • Business Growth Current by Yes Bank is another offering for startups. The average quarterly balance to maintain is Rs. 30,000. 
  • Customers can enjoy a free cash deposit facility upto Rs. 5 lakhs per month at any branch across India.

Yes Bank offers various other bank account schemes like Business Value Current Account, Business Benefit Current Account and Business Edge Current Account. However, Head Startup bank account is full of benefits for startups and makes an ideal choice. 

ICICI Bank

ICICI iStartup Bank Account (Highly Recommended)

  • The account is to fulfill the requirements of startup companies and help young entrepreneurs. 
  • It is a zero balance account for the first six months. 
  • The bank provides many other facilities. They offer a unique online business networking platform for their startup current account holders.

ICICI Shubhaarambh Bank Account

  • This current account is also designed for startups.
  • Maintaining minimum average balance is not required for the first six months, after which the account holder must maintain a monthly balance of Rs. 25,000.
  • Offers zero fee debit card for the first year.
  • 100 free cheque leaves per month, free internet banking, free unlimited cash withdrawals.
  • ICICI Bank also offers Smart Business Account and Roaming Current Account which are designed keeping in mind the various needs of businesses. However, iStartup bank account wins the race for the best current account for startups.

Kotak Bank

Kotak Neo Current Account

  • This Current Account helps the new businesses to grow.
  • The average quarterly balance (AQB) required for Neo Current Account is Rs. 10,000.
  • In addition to other benefits, the bank provides an unsecured overdraft facility for short-term requirements. 
  • It has a new feature that converts the current account balance to term deposits to earn a reasonable return on your idle balance.

Kotak Startup Regular Current Account

  • With a waiver of non maintenance charges for one year from the month of opening the account, the average quarterly balance required for this account is Rs. 50,000.
  • Other benefits are also provided in addition to the regular ones like free cheque clearing, free cheque payments and collections across the country.

Frequently Asked Questions (FAQs)

1. Every bank has several branches in my city. How should I pick a home branch for opening a current account for my startup?

Proximity to the branch is definitely an important consideration. It is also recommended that you take time to visit and try to develop a personal relationship with the branch manager because that will take you a long way later when you want to grow your business. If the manager isn’t available, come back with an appointment and have a chat about your startup.

If the manager is never available or a sales agent tries to open your account entirely without having to speak to the manager, that is a red flag.

2. Is it advisable to pay or waive off a few benefits for a dedicated account manager?

Customer service and dedicated account manager is absolutely irrelevant for a startup and all you need is a current account to get going. Do not worry about all that as long as you have the lowest minimum balance to maintain as you don’t want to lock your limited funds.

Options for a dedicated account manager are relevant for large businesses. So, you must consider this as your startup grows.

3. Which banks offer a zero balance current account?

A – Followings banks in India offer a zero balance current account – Bank of Baroda, ICICI Bank, Axis Bank, IndusInd Bank and HDFC Bank.

4. What documents do I need to provide to open a current account?

You will need the following documents – 

  1. Account Opening Form (AOF)
  2. Beneficial Ownership (BO)
  3. Documentation for Entity Proof – (any one of the following documents) – MOA, AOA, Certificate of Incorporation, Board Resolution, PAN Card, Entity Address Documentation- (any one of the following documents), Certificate of Registration, Business Licence issued by state- central govt., Sales Tax 2, IT return Certificate, VAT Certificate, PAN intimation letter, Import-Export certificate, Registration Cert with PF commissioner, Form 18
  4. Individual documentation (Identity Proof – anyone of the following documents) – PAN Card, Driving Licence, Passport, ID cards issued central & state govt., Passbook scheduled commercial bank, Marriage certificate, Voters ID card, Aadhar Card
  5. Signature Proof – (any one of the following documents) – PAN Card, Driving Licence, Passport, ID cards issued central & state govt

5. Should I go for a public (PSU) bank or a private bank for my current account?

It really depends what you are looking for. If you need services and offers, a private bank will be best suited for you. If you are looking for some cost savings on bank charges a public bank is ideal. 

However, almost every major bank’s customer service is equally good these days and the only difference is in Average Balance that you are required to maintain for your current account. Stay away from banks that require you to maintain a higher minimum balance because you will need the funds as a startup and you don’t want to lock your funds right from the beginning or waste your money paying penalties for not maintaining a minimum balance. Before you choose the right bank, check for the option for International Business Debit Card availability (You will need it even if you’ve never traveled abroad) and Internet banking facility.

Conclusion

Make sure to choose a bank that offers flexibility with current accounts. You may not have a good amount of funds to block as a minimum deposit as a startup. It is best to open an account with a bank where the minimum balance requirement is more petite and waivers on transaction charges and other benefits.

Happy Starting up!

Categories
GST

GST Audit – A quick guide for Goods and Service Tax Audit 2021.

We all know that businesses will need to do a GST audit with a turnover of more than Rs 2 crores from selling products or services during the financial year. 

But do you know what is GST Audit, GST Audit Limit, GST Audit Applicability?  Well, if you’re in confusion, You have come to the right place. In this article, we will learn about all these.

Table of Contents

What is a GST Audit and why do we need it?

As we know, GST is a taxation system in which a taxpayer must calculate his or her tax liability, pay any taxes, and file returns. As a result, a rigorous audit process is needed to ensure that the taxpayer has adequately self-assessed his tax payments. 

The government has taken several steps to ensure that GST is fully enforced, one of which is an audit.

A Goods and Services Tax audit contains the review of a GST enrolled individual’s records, refunds, and other documents. It also verifies the accuracy of the turnover reported, taxes charged, refunds received, input tax credits claimed, and other GST Act compliances that an approved expert must verify.

Therefore, it is an important process for both the government and businesses having GST.

Types of GST Audit

GST Audit VarietiesWho Performs this?When to do?
Audit on the basis of turnoverChartered Accountant (CA) as appointed by the taxpayerAt the moment of turnover exceeding  2 crores
General AuditCommissioner of CGST/SGST or any Officer authorized by the governmentAs per the order of Commissioner( 15 days notice in advance)
Specialised AuditCA(Chartered Accountant) to be appointed by the taxpayerAs per directions of Deputy Commissioner or Assistant Commissioner with prior approval of Deputy Commissioner

GST Audit Limit

Any taxable individual whose annual turnover exceeds the specified limit must have his accounting audited by a chartered accountant or a cost accountant. GST Audit limit or Threshold is Rs. 2 crore as per the latest GST Rules.

To do the GST Audit, the taxpayer needs to fulfill the following requirements.

  • The audited version of the financial statements.
  • A valid summary document in the form GSTR-9C coordinating the value of products reported in returns with its evaluated annual financial report, and other details as specified.

Things to include while calculating GST Audit Turnover limit

Following are the things that you must include while calculating the GST Audit turnover limit.

  • Applicants need to include the pieces of equipment that agents/workers are given on behalf of the principal.
  • All services that are excluded. Farm produce, for example, is delivered with labelled ready-to-eat food.
  • The GST doesn’t cover both taxes. For example, on the selling of movie tickets, there is an Entertainment Tax.
  • Except for supplies subject to the reverse charge, all taxable (interstate and intrastate) supplies are subject to the reverse charge.
  • The exchange of materials between various business market segments.
  • On a principal-to-principal basis, products in supply to/received from work employees.
  • All export/zero-rated goods that have value at that same amount.

Things to eliminate while calculating GST Audit Turnover Limit

  • All CGST, SGST, or IGST taxes, and Reimbursement Fee that is imposed under the Goods and Service Tax should be eliminated.
  • Inward supplies that are subject to a reverse rate should be excluded while calculating GST Audit Limit.
  • Schedule III of the CGST Rules. It includes activities that are neither a source of products nor a service.
  • Goods shipped to or returned by employees.

Accounts to be audited by the GST auditor:

Businesses eligible for GST audit should review the accounts or records listed as below:

  1. Purchases transaction data, Stock transactions, Sale transactions, and Expenditures transactions.
  2. Any records about the GST department’s interactions for the year. Utilisation records of the input tax credit.
  3. Output tax which is due.
  4. Generate a record of E-way bills during the audit period.

Mandatory Forms for GST Audit Applicability:

Which taxpayer should fill the forms?Mandatory Forms Requirement under GST
An ordinary taxpayer filing GSTR 1 and GSTR 3BGSTR-9
A Taxpayer under Composition SchemeGSTR-9A
E-commerce AdministratorGSTR-9B

Candidates eligible for GST Audit Applicability

Taxpayers whose turnover exceeds Rs. 2 crores in Financial YearGSTR-9C

GST Audit Date

The Ministry of Finance has set the deadline for filing GSTR 9, GSTR 9A, and GSTR 9C form for the fiscal year 2020-21 as of December 31, 2021. In order to avoid penalty, businesses must file the GSTR 9 annual return form and the GSTR 9C audit reconciliation form as soon as possible. However, sometimes the GST Audit Due Date gets an extension. In that case, it is crucial to get the necessary updates from the official press.

Now let us look at why it is vital to do Audit accurately. Because in case of improper GST audit, the government can take strict actions such as special audits or inspections.

Special Audit

1. When a special audit might happen?

The Assistant Commissioner may order a special audit depending on the nature and importance of the situation and also the revenue’s interest. Suppose he believes that the amount is not being accurately disclosed or that the incorrect compensation has been obtained during the inspection, investigation, or review. In that case, he may conduct a special goods and services tax audit.

2. Do Special audits have a time limit?

Yes, the auditor will have 90 days to file the report. However, the tax officer may extend this period for another 90 days on the taxable person’s or auditor’s request.

3. Is there any checklist for Goods and Service Tax Audit?

Yes, we have mentioned the GST Audit Checklist, which auditors should duly take care of.

  • GSTR 3B matches with GSTR 1 and GSTR 2A.
  • GSTR Amendment Correctly complies with ITC.
  • Examine the invoice format carefully.
  • Reversal of the Input Tax Credit (ITC) for failure to pay within 180 days.
  • e-Way Bills and Invoices Reconciliation.

Conclusion

In this article, we have learned about the Goods and Service Tax Audit in detail. It is an essential aspect of the GST, and you should always keep this guide handy to make sure the correct audit of Goods and Service for your business has been done.

Categories
Banking PAYMENTS

Merchant Discount Rate (MDR) – All You Need to Know

Have you ever heard the term MDR and confused as to what it is? Well! If yes, worry not, we are here to answer all your queries related to MDR or Merchant Discount Rate. Let’s start

What is Merchant Discount Rate?

Generally, it refers to the discount rate of a transaction. This equals to the entirety of all the payable taxes/charges, which an online or digital transaction necessitates.

Merchant Discount Rate includes all the bank charges charged by banks from all the customers and merchants to make their payment online or digital. The merchants set up the service, and before accepting the credit cards and debit cards for the processing of a settlement,  the merchants should agree to the rate.

MDR also includes the charges that an amount grossers to pay online or through a mobile wallet or needed to the bank for their service. The merchant discount rate may include all the charges, including interchange fees, miscellaneous fees referred to as zero-limit charges, gateway fees, cross-border fees, and assessment fees.

The MDR is the percentage part of the payment during any formal exchange of money. But this time, it is only based on digital and QR-based payments. The money the dealer pays is generally distributed between the following stakeholders:-

  • The bank
  • Vendors who access point of sale machine
  • And the card network provider.
Source – Atomtech

How Merchant Discount Rate Works?

It is the percentage of every transaction made. Merchant Discount Rate costs are dependent on the level of business transactions that the company processes. It also depends on the types of cards such as debit or credit cards used by customers, and the average transaction value, also known as average tickets or average sales. Usually, a customer obtains the goods and services from any merchant and pays their payment via their debit card or credit card. This process can also be completed using a point-of-sale [POS] device at the merchant’s physical location.

Suppose you went to a shop to buy any product. Now here you stand for consumers, and the shop stands for retailer or merchant. You make a digital payment by using a credit or debit card. The merchant using a point-of-sale (POS) terminal promotes this payment transaction. The bank charges MDR from the merchant when the customer pays the merchant.

Why is Merchant Discount Rate important?

  • Prepare a proper infrastructure for online payments to help to promote online payments help trade services and companies worldwide. Financial technologies allow making online payments more efficient with other organizations by building a POS system. This system provides options for credit lines and payment plans or other different kinds of loans. Processors are the essential parts of technological development in the processing of payments. The relationships between the payment processor and the merchant is vital to the trade infrastructure.
  • Dealers found it complicated to have the charges and agreements included in an account. They have many manufacturer’s options from where they can choose, and these suppliers will offer different fee cycles.  Dealers also make the payment by depositing processing fees and network and exchange fees to get the customer’s account. MDR is generally more for e-commerce payments because they need additional security costs.
  • Nowadays, people believe electronic payment to be the safest mode of money transaction. They get the option of paying from various sources to their clients using digital payment networks like NEFT, UPI, RTGS, etc. This has proved a vast profit to the clients and a dealer advantage. Most of the dealers will ask for minimum fees for using digital payment methods. This lowest charge on electronic payment also supports the cost of MDR.
  • Payment processing fee schedules are most complicatedly paid at a merchant discount rate for the retailers. However, some dealers levy a straight monthly charge. When the bank with an exchange provider is included in service contracts, the retailer discount rate for the retailers, but some may levy a flat fee on a monthly basis.  But when the dealing is with the bank only, then the merchant typically has a bundled MDR for the transaction to be in process.

MDR: A hot topic in the budget

Last year, there was an announcement. It stated that the businesses that have a turnover of Rs.50 crore should offer a digital payment offer on a low-cost basis to the customers. Additionally, the Merchant Discount Rate will not be levied on either customers or merchants.

In short, she addresses that neither the customer nor the merchant has to pay this overrated Merchant Discount Rate [MDR] while transaction of digital payments.

Who will bear the MDR costs?

This is the biggest question that arises when the customers and dealers both will not pay the MDR. Someone has to pay the MDR cost. During the budget speech, Our Finance Minister Nirmala Sitharaman addressed the nation and said. “RBI and Banks will absorb the costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment. The lawmakers are making the necessary amendments in the Income Tax Act and the Payments and Settlement Systems Act, 2007 to give effect to these provisions.

So, the RBI will bear the cost of MDR from now onwards.

MDR and Non-bank payment service providers

To support the digital world economy, the government announced significant changes in last year’s budget session. In the budget session of 2020, the government banned the merchant discount rate on merchants or consumers.  

The Finance Minister also added in her speech that this change in the digital transaction would lead to digital evolution. The parliament has made some strict rules to support this massive step of removing the Merchant Discount Rates for merchants. But on the other hand, the banks and merchants say that removing the MDR will hit their revenue stream as now the banks will need to pay MDR. Also, there is a disadvantage regarding the fee charged by merchants from consumers to recover merchant discount rate.

Frequently Asked Questions (FAQs)

1. Who sets Merchant Discount Rate?

Ans -When MDR prevailed in India, the bank from where the client processed the transaction used to set it.

2. How is MDR Calculated?

Ans – MDR is calculated from the given value of each processed transaction. The rates rely on the type of business, types of debt, and credit card used by customers.

3. Why is Merchant Discount Topic so popular?

Ans – The Merchant Discount Rate is popular in India because our Finance Minister banned this MDR in budget 2020.

4. Why is Merchant Discount Rate banned in India?

Ans – The Merchant Discount Rate is banned in India to promote digital transactions worldwide. Further, it creates a cashless community and facilitates safe money transactions.

5. What are the benefits of Merchant Discount Rate?

Ans – The key benefit of MDR was that it boosted transactions via home-grown payments systems, like UPI, at the dealer’s doorstep.

Categories
GST

E-Invoice Under GST: Meaning, Process, Challenge, and Exemption Limit.

E-Invoice under GST

The government of India implemented E-invoice under the GST system back in 2020, and most organizations supported the administration’s decision. Initially, the companies with an annual turnover of Rs 500+ crores were liable to generate e-invoices. However, with each notification, the turnover limit for e-invoice kept reducing. And the current turnover limit required for e-invoice generation is Rs. 50+ crores. The chances are no less that it becomes compulsory for every business to file digital invoices. 

There are different terminologies, exemptions, & applications to e-invoicing in GST & this article would help us understand it.

Table of Contents

What is E-invoicing in GST? 

E-invoicing under GST is exchanging the invoice bill between supplier & buyer in an authenticated & integrated “electronic format.” The introduction of the concept was to replace the conventional paper-based manual process and reduce tax evasions. Under the system, all the registered businesses in India have to generate their unique invoice reference number (IRN) on Invoice Registration Portal (IRP).  

Invoice Reference Number

Invoice reference number (IRN) is a unique 64 characters hash based on four parameters. It includes document number & type, supplier GSTIN, and financial year. Some notable features of IRN are:

  1. Firstly, The GST system’s Invoice Registry saves the Invoice Reference Number generated by the IRP portal;
  2. It is different from Invoice Number;
  3. Generation of e-invoice should be before the movement of goods or issuance of the invoice;
  4. And, the generated IRN remains on the portal for two days.

Applicability of E-invoice under GST

The amendment for making E-invoicing mandatory has been introduced in different phases, based majorly on the aggregate turnover value of the business. The first phase went live in October 2020, when the government made digital invoicing mandatory for all companies with an annual turnover of more than Rs. 500 crore. 

The second phase went live on 1st January 2021, when the government mandated the invoice filling for businesses having an AATO of INR 100+ crores.

Similarly, the third phase went live on 01st April 2021. Now, the organizations with an AATO of more than Rs. 50 crores are required to make digital invoices.

Note 1: The only seller can generate e-invoice and not the receivers, transporters, or customers. However, eCommerce platforms need to create invoices on behalf of their suppliers.  

Note 2: E-invoice under GST to be calculated from FY 2017-18, and respective aggregate annual turnover businesses need to comply. 

Note 3: E-invoice under GST needs to be generated only for B2B  & Export bills and not for B2C bills. 

Example of E-invoice Applicability

Illustration for Annual Aggregate Turnover (AATO) of more than 50 Crore.

ParticularsExample 1Example 2
Taxable Turnover25 Crore25 Crore
Exempted Turnover7.5 Crore10 Crore
Nil Rated Supply5 Crore5.5 Crore
Export Turnover10 Crore10 Crore
Sub Total:47.5 Crore50.5 Crore
CGST, SGST, IGST, CESS3 Crore5 Crore
Grand Total:51.5 Crore55.5 Crore
Applicability Of E-InvoicingNOT APPLICABLE*APPLICABLE**

E-Invoice Portal Exemption 

The Government of India has also exempted certain business entities from making e-invoices, and it includes:

  • Passenger transportation services  Suppliers; 
  • NBFCs;
  • Banking company;
  • Financial Institution;
  • Insurance Company;
  • GTA;
  • Admission to the exhibition of cinematograph films in PVR & other multiplex screens service suppliers;
  • All the SEZ units (excluding SEZ developers)

Benefits of E-invoice Portal

Tracking: E-invoice under GST facilitates real-time tracking for administration. It allows easy & quick availability for ITC (Input Tax Credit). 

Automatic Processing: E-invoicing in GST reduces the need for the manual reporting process. The taxpayer is required to record it & get it authorized on IRP (Invoice Registration Portal). After authentication, the GST portal would update all the invoice details.  

Transparency & Fewer Errors: Every e-invoice has a digitally signed QR code that contains all the details and can be read by anyone, allowing transparency, interoperability, and fewer error chances. 

Easy & Faster: The unified e-invoice system would speed up the auditing method and availability of genuine ITC (input tax credits). 

Challenges in Generating E-invoice under GST

Some of the most common challenges which businesses might encounter due to the amendment are:

  • The administration is working over a plan to stop generating digital bills if the invoice reference number (IRN) is not available.
  • Customers might not be able to claim ITC benefits if the e-invoice is not available. As a result, customers could start denying the goods.  
  • Non-authorized E-invoices by IRP (Invoice Registration Portal) would not be valid. The businesses would attract an Rs. 10,000 penalty for non-compliance;
  • GST authorities might levy fines might on the transportation of goods that are without a valid tax e-invoice. 

How to Generate E-Invoice GST?

Here are steps by step guide to generate E-invoice under GST :

Step 1: All the businesses need to create E-invoices on their accounting portals. However, they need to ensure that all the required fields are mentioned and in the proper format. If the case fails, then the invoice would be held invalid.

Step 2: Getting approved through the government E-invoice portal – IRP (Invoice Registration Portal), is a government portal, where every registrar registers and gets an IRN (Invoice Registering Number). IRN is a unique identification number for each invoice, generated by registered firms once an invoice is authorized. 

Step 3: Once a business registers for E-invoice under GST, the IRP portal would generate a digitally signed QR code with specific details from the invoice. The digitally signed QR code shall be printed on the invoice too. 

After this process, e-invoice would be authenticated, and all the related information gets mentioned on the government’s EWB portal. 

Last Words

So, this was all about e-invoicing in GST. The government and administration introduced the system at the 37th GST council meeting in September 2019. The primary objective was to build a fast, reliable, error-free, and interoperable billing ecosystem in India.

Frequently Asked Questions

Q1. What E-invoicing in GST?

E-Invoicing is a digitally authenticated method to generate electronic bills. It requires all the B2B & export firms to register with the government-facilitated invoice registration portal (IRP). The system would generate IRN (Invoice Reference Number) and a QR code with all the details for every invoice.

Q2. Who needs to generate an E-Invoice GST?

As per the latest notification, all the organizations having an AATO (Annual Aggregate Turnover) of Rs. 50 crore need to generate an E-invoice under GST. Earlier, the specified AATO limit was Rs. 100 crores.

Q3. What are required & not required documents, during reporting on IRP?

The supplier needs to report the following document to IRP:

  • Supplier Credit Note
  • Debit Note
  • Tax Invoice – B2B & b2G
  • Exports Invoice
  • SEZ Developer Invoice

Similarly, the supplier does not need to report below mentioned documents:

  • Delivery Challan
  • Bill of Supply 
  • Job Work Challan
  • Receipt/Refund Voucher

Q4. Does the E-invoice portal support digital invoice generation?

No, the IRP portal doesn’t have the option to generate an e-invoice GST directly. Companies need to hire professionals or use tools. However, all the invoices need to be in the proper, exact format. They must mention the fields as per administration suggestions. The GST portal has also suggested a list of eight accounting tools & billing software.     

Q5. What is a QR code?

After successfully authorizing the invoice on IRP, the system facilitates a digitally signed QR code that contains important details about the invoice, which are:

  • Recipient GSTIN 
  • Supplier GSTIN 
  • IRN (Invoice Reference Number)
  • Number of Items
  • Item HSN Code
  • Value of Invoice
  • Invoice number

Note that any person who scans the code can read the details.  

Q6. Can IRN be deleted or cancelled after generation?

If the invoice gets approved and the system generates IRN, it can not be deleted from the portal (IRP). But one can cancel it within 24 hours. However, the invoice must be fully cancelled.