Closure of Business and Impact on Account

• Once a business is legally closed, its current account must also be formally closed.
• The account becomes inactive if no transactions are recorded for a set period.
• Banks do not automatically close the account unless requested by the business.
• Continued inactivity without formal closure may lead to classification as dormant.
• Any misuse after business closure may result in legal or financial penalties.

Steps to Close the Current Account

• Submit a written application for account closure to the bank branch.
• Provide valid ID proof, business closure documents, and unused cheques or cards.
• Clear any pending dues, overdraft amounts, or service charges.
• Mention the mode for refunding the remaining account balance.
• Account closure is confirmed through a closure letter or acknowledgment slip.

Required Documentation

• Business closure certificate or cancellation of GST registration, if applicable.
• PAN, Aadhaar, or passport copy of the authorized signatory.
• Board resolution in case of companies or societies authorizing account closure.
• Signed account closure form with updated contact and bank details.
• Statement of account for the last transaction period may be requested.

Bank Processing and Timeline

• The bank will verify the identity of the account holder and closure intent.
• Any debit freeze or lien must be resolved before closure.
• Account balance is refunded by cheque, transfer, or cash as per instruction.
• The process typically takes 3 to 7 working days based on documentation.
• The account is then permanently closed and cannot be reactivated.

Legal and Financial Implications

• Failure to close the account may lead to continued maintenance charges.
• Unused balances may be treated as unclaimed funds after several years.
• Tax authorities may question account usage after business dissolution.
• Proper closure ensures a clean financial record and avoids future disputes.
• It also safeguards against unauthorized use or identity-related risks.